Primark owner to reimburse £ 121million in leave despite lower sales Business News

The owner of Primark has pledged to return £ 121million claimed under the holiday program despite news of declining profits as stores remained closed for much of the fall season and winter.

Associated British Foods (ABF), which owns Primark as well as grocery brands like Twinings tea and Ryvita, reported a 50 percent drop in operating profits in the six months to February 27.

Primark boss George Weston said the company claimed £ 98million in the previous fiscal year and an additional £ 79million in the current year so far to support the 65,000 employees from Primark.

He said he believed Primark’s stores would start generating cash again after they reopened in England last week, as Covid restrictions were relaxed. The company expects 68 percent of its store space to be open by the end of the month.

Primark became the last major retailer to restore government support. Major supermarket chains, including Tesco, Sainsbury’s and Morrison’s, have collectively brought in more than £ 2 billion in corporate tariff relief, which was aimed at helping struggling businesses weather the pandemic.

ABF has announced that it will restart its dividend to shareholders which was suspended last year. It will pay £ 49million at 6.2 pence per share.

Some large companies have been criticized for paying exceptional dividends to shareholders while accepting financial support funded by taxpayers.

While ABF has lost hundreds of millions of pounds in clothing sales, its food brands have benefited from the surge in supermarket sales as shoppers are stuck in their homes.

Its grocery, sugar, agriculture and ingredients divisions all increased revenues and posted an overall 30 percent increase in profits from the previous period.

Mr Weston said: “We are delighted to welcome customers back to our stores as lockdowns ease and we are delighted with record sales in England and Wales in the week following the reopening on April 12th.

“With our success in a number of new markets, as large as Poland and Florida, we are as confident as we have ever been of Primark’s long-term growth prospects.”

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This notice was published: 2021-04-20 14:30:58