Christmas trading has started early as families gear up for the festive season and seek to spread costs across several pay packets, says ABF chief executive George Weston.
The Primark and Silver Spoon giant saw annual sales jump 16% to £19.7 billion and thinks next year looks strong.
The profits, up 9% to £1.47 billion, allow it to pay a huge dividend of 60p and plan another £500 million of share buybacks, on top of £500million already done. That 60p divi is worth £459 million. The charitable foundation gets 45% of that, shareholders the same, and the Weston family 10% -- £45.9million.
Primark has 432 stores and plans another 100 by 2026. “Then we will just keep going,” says Weston. Stores outside the UK are doing better than those in the home market, but Primark in London is on the up. The stores are busiest between 4pm and 8pm, a sign that people are back in offices.
“Value is always desired by customers, maybe particularly when people have less disposable income. We are selling a lot of lipstick, a lot of cosmetics, what I call sweet treats,” he said.
ABF said: “Cold weather essentials and other seasonal product lines, including our well-received velvet plush leggings, drove strong sales leading into a recordChristmas season which included a resurgence in women's partywear, tailoring separates and beauty products as a return to festive socialising gathered pace.”
The food arm is benefiting from the home baking trend, a reflection of the success of TV shows such as Great British Bake Off and of the need to save money.
ABF has seen inflation come down reducing transport costs, which should allow margins at Primark to return to about 10%.
A trial of click and collect in some stores seems to be working.He said: "At the outset of this financial year the Group was facing very significant economic challenges caused in part by major geo-political events. Looking back on the year, it is clear to me that the Group performed extremely well and is as a result now well positioned for the year ahead. Trading at Primark was excellent under the circumstances. At the beginning of the year we implemented selective price increases partially to protect profitability, on the grounds that the significant input cost inflation was temporary. That careful pricing delivered as intended, with customers continuing to shop with us enthusiastically.”
ABF shares jumped 120p to 2226p. The business is valued at £17billion.
