Business

Primark forecasts strong growth

Primark
Image caption The Primark chain has continued to expand

Clothing chain Primark has continued to perform strongly and expects annual sales growth of 6%, owner Associated British Foods (ABF) has said.

A good performance in Europe and the UK had driven the success, the firm added.

The strength of sterling against the dollar had also benefited it where goods were bought in the US currency, ABF said.

But it warned the VAT increase in the UK and higher freight costs and cotton prices would squeeze margins.

The sales growth forecast - for the year to 18 September - is on a like-for-like basis which strips out the effect of new stores.

ABF expects to have opened eight new Primark stores in the six months to that date - five in the UK and three in Spain.

The firm's other businesses also include Silver Spoon sugar and the UK's Allied Bakeries.

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