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Primark plans overseas expansion as margins bounce back

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Primark will accelerate its international expansion in major markets including the US, France, Italy and Iberia as owner Associated British Foods forecast a significant increase in sales and “sharp improvement” in margins next year.

Like-for-like sales at Primark were down 12 per cent on pre-pandemic levels in the 53 weeks to mid-September, ABF said, while it pointed to a “strong profit margin recovery” at the retailer. ABF said in September profit would be better than expected thanks to a strong performance in its food division.

“Although the possibility of further trading restrictions cannot be ruled out, we expect Primark to deliver a much improved margin and profit next year,” boss George Weston said.

Overall group revenues were flat year-on-year at £13.9bn while pre-tax profits were 6 per cent higher at £725m. But sales and profits remain below pre-Covid levels, with a third of Primark’s “available trading days” lost to store closures — more than the previous year.


A trio of upbeat real estate updates this morning.

Savills reports no let up in the appetite for the UK’s prime home. It pushed back its estimate of the point at which the market will start tapering off to next year, and the group said its UK business was likely to “materially exceed” both its earlier expectations for 2021 and its 2019 performance.

Housebuilder Persimmon said sales rates continue to be well ahead of 2019 levels, with sales rates between July and the start of November 16 per cent of 2019 levels. And rival Vistry said that pricing had “continued to move forward across all areas” because of strong demand, although more modestly during the latest period.

Genomics group Oxford Nanopore has upgraded its revenue guidance for next year and the year after a “significant expansion of the group’s activities in a large customer project in UAE”.

And Rolls-Royce has secured the funding to develop a fleet of mini nuclear reactors designed to help the UK government meet net zero carbon targets, our correspondents report. US energy company Exelon Generation and an investment vehicle backed by France’s Perrodo family will invest alongside Rolls-Royce, unlocking a £210m commitment from the government. Sylvia Pfeifer and Nathalie Thomas have the full story here.

Also out today are updates from insurer Direct Line and luxury retailer Watches of Switzerland.

Beyond the Square Mile

German publishing group Axel Springer plans to force employees to disclose sexual relationships between managers and subordinates after a scandal at flagship paper Bild, our correspondents report. But the plan has been met with scepticism from the company’s workers representatives in Germany — and stops short of blocking Springer’s most powerful executives from pursuing relationships with junior staff.

Euronext is breaking a deal with a subsidiary of the London Stock Exchange Group to shift clearing functions to Italy, Philip Stafford reports. The move further reduces the role of UK-based institutions in pivotal areas of Europe’s financial markets, and underscores the extent to which Euronext has leveraged its €4.4bn acquisition of Borsa Italiana from the LSE earlier this year to tilt its operations to the EU and away from London.

Shares in SoftBank Group jumped as much as 12.5 per cent on Tuesday morning after the Japanese company said it would buy back ¥1tn ($8.8bn) in stock, William Langley reports from Hong Kong.

Australia’s biggest gold miner Newcrest Mining has struck a deal to buy Canada’s Pretium Resources in a deal worth about $2.8bn.

And Alphabet joined Apple and Microsoft yesterday in the exclusive $2tn club. The market capitalisation of Google’s owner has grown by about $850bn since the start of the year, Richard Waters reports from San Francisco.

Essential comment before you go

Sarah O’Connor wonders this week: “Where have all the workers gone?” But she’s not necessarily talking about the workers you might think. It’s not just migrants who have headed home, but “an army of older workers has headed for the exit too”.

And I almost forgot — but do read my column from yesterday! After an extraordinary interview by THG founder Matt Moulding last week in which he said he wished he hadn’t IPO’d in the UK and had gone to the States instead, I set out why London’s listing regime is not to blame for the company’s troubles.

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