The Dublin-based entity behind fashion retailer Primark (which operates as Penneys in the Irish market) made profits of more than €1 million per day last year, according to accounts filed with the Companies Registration Office here.
Accounts for Primark Ltd, a Dublin-registered subsidiary of Associated British Foods, show that its pre-tax profit rose by 5.7 per cent to €416.6 million in the year ended September 16th, 2023.
When corporation tax of €40.5 million was deducted, the company was left with an after-tax profit of €376.1 million, up from €341.8 million the year before.
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The company paid no dividends for the period as compared with a payment of €475 million the year before.
The retailer had 37 stores in Ireland during the financial period, although it opened a 38th store in Bray, Co Wicklow, last week. Primark Ltd also provides inventory to other entities within the group globally, manages the so-called “Primark Way” franchise, and held its intellectual property assets.
Turnover amounted to €3.9 billion, which was up from €3.2 billion a year earlier. Cost of sales amounted to €3.3 billion, which was up from €2.6 billion.
Turnover from retail trading in Ireland in the period came to €744.5 million, which was up 7.4 per cent from €693.1 million a year earlier. Its trading performance in stores was described as “strong” with higher footfall reflected through increased sales.
The opening of its Tallaght store at the end of the prior year contributed to increased sales, along with newly expanded outlets in Dundrum, Clonmel, and Galway, it said.
Turnover from the intercompany supply of inventory was €2.4 billion, up from €1.8 billion. Franchise income was €784.6 million, up from €670.1 million.
Its gross profit margin decreased from 18 per cent to 15.9 per cent, which was primarily driven by higher costs. Inflationary pressures on raw materials and freight costs contributed, the accounts stated.
Increased levels of stock loss in the year had an “adverse impact” on gross margin, while like-for-like sales on a one-year basis were described as “strong and consistent”.
The company intends to invest €250 million in the Irish market over the coming years, creating more than 1,000 jobs in Ireland and increasing selling space in Ireland by an estimated 20 per cent, according to the directors’ report.
It plans to have 530 stores globally by the end of the 2026 fiscal period, with 24 openings planned for the current financial year. It plans to have 60 stores in the US by 2026.
In terms of risks to the business, the company cited recent global financial data showing a heightened risk of recession and said a prolonged period of stagnation was a “real possibility”.
“This will increase consumer debt problems resulting in increasing cost of living and putting additional strain on household budgets,” it said.
“Whilst consumer spending has proven to be more resilient than anticipated at the start of the financial period, household budgets continue to face real pressures as a result of high inflation and interest rates and general economic uncertainty.
“This means that some consumers are having to make challenging and difficult choices in respect of what they spend and where they spend it.”
The company employed 7,064 people during the year. This was up from 6,483 a year earlier. More than half of these were working part-time. The company spent €300.7 million on employee costs, which was up from €252.5 million the year before.
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