Nov 5, 2019
Pound’s recovery set to help margins at ABF’s Primark
The recovery in sterling may lead to Primark's margins falling by less than expected during its next financial year, although Germany remains a difficult market for the fashion retailer. Associated British Foods, the owner of Primark, had already warned that a stronger US dollar would reduce its profit margins in the year to September 2020. "The sterling exchange rate is currently very volatile but, at current exchange rates, we now expect margin in the second half to be in line with the same period this year and margin for the full year to be only a small reduction on that achieved this year," the group said in its full-year results statement. Operating margin at Primark reached 11.7 per cent this year. Elsewhere in the group, sugar profits were much lower - as expected - at just £26m following major changes to the market structure within the EU. However, the group noted that performance in the second half was ahead of both the prior year and its expectations, and said it expects a "Material recover" this year amid low stocks and firmer pricing.
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