Sunday, May 5

House owners of Primark and Premier Inn word financial strain however report indicators of bounce again

Two of the UK’s greatest companies have reported indicators of a post-COVID bounce-back, regardless of wider financial pressures.

Primark proprietor Associated British Foods and Premier Inn proprietor Whitbread each reported monetary outcomes on Tuesday morning and, whereas they famous the continuing financial strain, they every had some excellent news.

ABF reported a 3% fall in first-half revenue and stated it was sticking with earlier steering that the full-year outlook can be flat.

But it additionally stated that Primark noticed a 15% surge in gross sales within the six months to early March in contrast with the identical interval a yr in the past.

Primark’s gross sales, together with its retailers in Europe, rose to £4.2bn as extra consumers returned to excessive streets and retail parks, and extra staff returned to metropolis centres, ABF stated.

The chain’s discount choices additionally attracted new clients, as folks combating the price of dwelling disaster sought extra reasonably priced gadgets.

But, like many companies, ABF stated it needed to push up costs to offset among the influence of price inflation.

ABF chief government George Weston stated: “This period was marked by extreme and volatile inflation in all our businesses.

“We have taken appreciable motion to mitigate these prices by means of operational price financial savings and, the place acceptable, pricing.

“Primark has been very successful in this period in attracting new customers with its proposition of good quality merchandise combined with price leadership and well-invested stores.

“We have had a really sturdy contribution from new shops opened within the interval, and at this time we’re asserting plans for the event of our Primark enterprise in southern states of the US.”

Read extra:
Primark to open a minimum of 4 new shops and create 850 jobs
‘Pubs superwoman’ Jones in talks to join Whitbread board

ABF was the biggest faller in the FTSE 100 on Tuesday morning, down more than 5.5% on concerns about rising costs eating into profit margins.

Meanwhile, Premier Inn owner Whitbread Plc said its annual profit had bettered pre-pandemic levels, helped by strong demand for accommodation and leisure travel as more people enjoy holidays free of COVID-19 restrictions.

Budget hotel chains have benefitted from increasing demand as consumers try to cut spending due to cost of living pressures.

Whitbread said strong trading had seen its sales up 17% in the seven weeks ending 20 April compared to a year ago and Premier Inn saw accommodation sales 55% ahead of the same time last year in the UK.

Whitbread reported an adjusted profit before tax of £413m for the 52 weeks ending 2 March, adding that it expects inflation to be between 7 and 8% in the coming full year, but is “assured in with the ability to offset the influence on UK earnings by means of like-for-like gross sales progress, new room growth and a give attention to price efficiencies”.

Dominic Paul, Whitbread chief executive, said: “These are a incredible set of outcomes.

“While the recovery in market demand in conjunction with a structural decline in the independent sector has provided a helpful backdrop, it is the combination of our own initiatives and our clearly differentiated business model that has sustained our brand strength and delivered such an impressive operational and financial performance.”

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