Primark owner Associated British Foods (LON: ABF) posted a 60% decline in profits to £362 million.
Retailers saw a 24% decline in revenue for the year ended September 12th. This was driven by the third quarter store closures during lockdown.
Sales are recovering, but they still fall 12% in the UK and 17% in stores in Europe.
Thanks to the government’s Furlough scheme and reduced spending, Primark cut costs by 50% during the lockdown.
The group warned yesterday that the second lockdown would rise by £375 million.
“As of today, all Primark stores in Catalonia, including the Republic of Ireland, France, Belgium, Wales, Spain and Slovenia have been temporarily closed, accounting for 19% of the retail sales space,” the group said.
“The period of closure announced will vary by market. The UK government has announced its intention to close non-essential UK shops for a month from November 5th to December 2nd. Assuming this will be passed by the UK Parliament on November 4th, 57% of our sales space will be temporarily closed from November 5th.”
“The estimated loss on sales for these stores, including stores in England during the announced closure period, is £375 million.”
Geroge Weston, CEO of ABF, commented on the latest transaction updates.
“We are proud of how our people responded to the many challenges presented by Covid-19.
“All over, we have provided safe and nutritious foods under the most exceptional conditions, demonstrating the value and resilience of our supply chain. Our food business has achieved a 26% adjusted operating profit increase due to high demand and increased productivity.
“After three months of closures, Primark provided robust performance and received an overwhelmingly positive response when it safely welcomed customers to the store. While uncertainty remains about short-term temporary store closures, sales since the end of the year at £2 billion show the link and appeal of the amount of the amount of the money.
“We have people and cash resources to address the challenges ahead and are investing in the future.”
ABF shares (LON: ABF) trade at -1% at 1.704,00 (0942GMT).
