The owner of Primark has pledged to return £ 121million claimed under the holiday program despite news of plummeting profits as stores remained closed for much of the fall season and d ‘winter.
Associated British Foods (ABF), which owns Primark as well as grocery brands like Twinings tea and Ryvita, announced a 50% drop in operating profits in the six months to February 27.
Primark boss George Weston said the company had claimed £ 98million in the previous fiscal year and an additional £ 79million in the current year so far to support the 65 000 Primark employees.
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% of its stores to be open by the end of the month.
Primark became the last major retailer to return government support. Major supermarket chains, including Tesco, Sainsbury’s and Morrison’s, have collectively returned more than £ 2 billion in business rate relief that was intended to help struggling businesses weather the pandemic.
ABF has announced that it will resume 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 closures loosen and we are delighted with record sales in England and Wales during the week following the reopening on the 12th. April.
“With our success in a number of new markets, as large as Poland and Florida, we are more confident than ever of Primark’s long-term growth prospects. “