Penneys business is booming

The retailer's sales are up - but Brexit pressures are squeezing margins

Business is booming for Primark's parent company, its profits grew by a massive 36% to £652m in the six months to the end of March.

Primark, or Penney's in Ireland, is owned by Associated British Foods. Its business interests are mainly in foods and ingredients.

George Weston, Chief Executive of Associated British Foods, commented:

"The underlying growth of the group at constant currency was strong in the first half. Primark delivered a substantial increase in selling space which, together with its strong consumer offering, contributed to a further increase in our share of the total clothing market.

"Furthermore, we achieved a more acceptable rate of return in Sugar and further good progress was made by our Ingredients and Grocery businesses," he added in a statement.

The group's revenue rose to £7.3bn - which was a 19% increase.

"The impact of the US dollar’s strength on Primark’s input costs have been well flagged and our commitment to price leadership in clothing retail has seen, as forecast, a decline in its operating margin," the company warned.

Primark has promised to absorb costs related to sterling's dip across its business without increasing prices.

Its sales are up by 11% this year on a constant currency basis as it has continued to open new stores across Europe and in the US.