UK retailer Primark announces full year 2012 results 

-Revenue £3,503m (2011, £3,043m)

-Adjusted operating pro?t £356m (2011, £309m)

-Adjusted operating pro?t margin 10.2% (2011, 10.2%)

-Return on average capital employed 19.2% (2011, 18.2%) 

 

Primark is a major retail group employing 43,000 people. It operates stores in the UK, Republic of Ireland, Spain, Portugal, Germany, the Netherlands, Belgium and Austria. 

 

It offers customers quality, up-to-the- minute fashion at value-for-money prices. Buying and merchandising teams in Dublin (Republic of Ireland) and Reading (UK) travel internationally to source and buy fashion items that best re?ect each season’s key fashion trends. Primark’s range includes womens wear, lingerie, childrens wear, menswear, footwear, accessories, hosiery and homeware.

 

Revenue was 17% ahead of last year at constant exchange rates. As a result of the weakening of the euro in the second half of the year, the increase was 15% when translated at actual exchange rates. This excellent result was driven by an increase in retail selling space and like-for-like sales growth of 3% for the full year. 

 

UK trading was particularly strong during the summer and sales in continental Europe remained buoyant. Trading in newly opened stores exceeded expectations and the opening of the new store in Berlin in July saw our most successful ?rst day’s sales ever. Sales of the autumn/winter range in the new ?nancial year are encouraging.

 

The operating pro?t margin at 10.2% was level with that achieved last year. In the ?rst half margins were lower than last year re?ecting the absorption of high cotton costs and the increase in VAT in the UK, which we chose not to, pass on to customers. As expected, margins in the second half increased re?ecting the fall in cotton prices. 

 

Operating margins are expected to improve further in the ?rst half of the new ?nancial year with the bene?t of lower cotton prices but will be partly constrained by the three percentage point increase in VAT rates in Spain from 1 September 2012. Operating pro?t at constant currency was 17% higher than last year re?ecting the strong revenue growth. 

 

At actual exchange rates pro?t was 15% ahead. Primark continued to make signi?cant progress with its ethical trade programme during the year. A member of the Ethical Trading Initiative (ETI) since 2006, it is now ranked at ‘Leader’ level which is the highest status achievable. 

 

 

 

The impact of our in country teams of ethical trading specialists has been signi?cant in supporting sustainable improvements within supplier factories, providing greater visibility across the supply chain as well as improving the management of our audit programme.  

 

We conducted 1,795 audits in the last calendar year and ethical trade training continues to be provided to every new Primark employee our new store design aims to provide an inspirational, exciting, fashionable and fun shopping environment for all customers. 

 

Strategically placed mannequins combine with video screens to inspire customers to choose out?ts that are readily available on adjacent ?xtures. Prominent directional signage allows easy navigation through the store and the con?dent expression of our Primark brand on building facades and at various focal points encourages customers to feel engaged with the brand. Customer service has been enhanced by providing a higher ratio of ?tting rooms and cash registers to ensure a smoother experience when trying out?ts on and paying for them. 

 

The pace of store and retail selling space expansion increased this year. By the ?nancial year end we had opened 19 new stores and added 0.9 million sq ft of selling space bringing the total to 242 stores and 8.2 million sq ft. Three new stores were opened in the UK, 11 in Iberia and ?ve in northern continental Europe. Highlights of the year included a major expansion in Iberia, particularly Spain, the opening of a ?agship store on Princes Street in Edinburgh and four large stores in Germany. 

 

The new store in Berlin achieved the distinction of becoming Primark’s highest grossing store on an opening day. The momentum of our store opening programme has continued into the new ?nancial year with our second store on London’s Oxford Street and our ?rst store in Austria, in Innsbruck, during September.