• FY sales up 16%
  • Operating margin widens to 13.4%
  • Operating profit up 29%
Primark now operates in nine countries

Primark now operates in nine countries

Primark said it "substantially out-performed" in its last fiscal year, and revealed plans to extend its programme of structural assessments to include factories producing for it outside Bangladesh.

Revenues at the value fashion retailer were 16% ahead of last year at GBP4.95bn (US$7.92bn) for the year ended 13 September. This was driven by an increase in retail selling space, like-for-like sales growth of 4%, and superior sales densities in new stores.

The year was also characterised by success for Primark's autumn/winter and spring/summer ranges, with sales over the Christmas period boosted in the third quarter by warm weather. The retailer also began trading in France in December last year and sales across all five stores have been "exceptional", it said.

Primark has added a net 1.2m sq ft of selling space, taking its total estate to over 10m sq ft at the financial year end, bringing the number of countries in which it operates to nine. The retailer also recently announced plans to launch in the north-east of the US, with the first stores expected to open late in 2015 and with up to ten stores by the end of 2016.

Adjusted operating profit margin also improved in the period, to 13.4% from 12% a year earlier, reflecting the benefit of warehouse and distribution efficiencies and lower freight rates. Operating profit was up 29% to GBP662m.

"Primark's trading success and significant expansion delivered another magnificent year," said chief executive George Weston. "We were delighted by the success of the French stores, both for the size of the crowds on opening days, which were overwhelming, but more importantly for the tremendous customer enthusiasm for Primark, in very different cities, which was sustained throughout the rest of the year."

Weston also spoke of Primark's response to the Rana Plaza disaster in Bangladesh in 2013, which he described as being "extensive". The retailer has since been carrying out building surveys in Bangladesh to assess the structural integrity of all 80 factories from which it sources garments.

The chief executive said Primark intends to extend its programme of structural assessments to include factories producing for it outside Bangladesh.

Jon Copestake, retail analyst at The Economist Intelligence Unit noted: "It's refreshing to see Primark stand out from the crowd by crediting warm weather for good sales rather than blaming it for poor sales as many of its peers have. Primark is certainly enjoying its time in the sunshine."

However, he added a note of caution: "It is not long since Asos was enjoying strong sales growth and seemed invulnerable, only for things to go wrong relatively quickly as rapid international expansion overstretched the online seller. This may present a warning to Primark on the pitfalls of expanding too rapidly, especially since same store sales only rose by 4%, with future expansion potentially cannibalising this margin.”