Primark sales boost ABF's full-year outlook

Primark's revenue in the three months to 19 June was £1.6bn, up from £0.6bn a year earlier, and the retailer's like-for-like sales rose 3%. Sales in stores that reopened from 12 April beat expectations in all markets and the like-for-like performance was better than earlier periods during the pandemic.

ABF said it expected Primark's annual profit to be broadly in line with a year earlier. It had previously guided investors that Primark's profit would be "somewhat lower" than the year before. Primark's business was hit hard during Covid-19 lockdowns because it has no online sales operation.

"Our outlook for the adjusted operating profit for the group, stated before repayment of job retention monies, is now in line with last year," ABF said.

ABF shares rose 4.7% to £23.21 at 10:45 BST and were the biggest gainers in the FTSE 100 index.

Anubhav Malhotra, an analyst at Liberum with a 'buy' rating on ABF shares, said: "Primark’s strong early performance post re-opening re-affirms our view that the Primark proposition remains highly relevant and resonates even with today’s digitally native consumers, a fact that remains underappreciated by investors."

Group cash generation was ahead of expectations and much stronger than prior years, ABF said. Net cash before lease liabilities rose to more than £1.45bn at the end of the third quarter from £705m at the start of the quarter.

Grocery sales fell 3% in the third quarter to £871m from the very high levels recorded a year earlier. Sales at other divisions rose, led by sugar which recorded a 21% increase to £406m boosted by higher prices.