Primark to reimburse £ 121million in cash on leave despite falling sales



The Rimark owner will reimburse £ 121million in leave money claimed under government job retention programs and pay shareholders a dividend despite declining profits.

Associated British Foods (ABF) said the move comes as stores remained closed for most of the fall and winter period, leading to falling revenues and profits.

Sales were down 17% to £ 6.3bn and adjusted operating profit fell 50% to £ 319m in the six months to February 27.

Coronavirus – Mon Apr 12, 2021 / PA wire

Managing Director George Weston said the refunds would be made because he was confident stores will become cash-generating following the easing of restrictions in England and Wales, where 40% of Primark’s retail space is located.

He 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 April 12th.

“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. “

Regarding the leave program, he said the company had requested £ 98million in the previous financial year to support Primark’s 65,000 employees.

“An additional £ 79million has been claimed in the six months leading up to February 27 and so far the amount is now £ 121million,” the company said.

President Michael McLintock added: ‘Although uncertainty remains, a large part of the UK adult population has now been vaccinated and last week we witnessed the successful reopening of the English and Welsh Primark stores, which represent approximately 40% of our total retail space.

“Assuming our English and Welsh stores remain open, Primark will revert to cash generation.

“As a result, we do not plan to make any further claims against any government employment retention programs to which we would be eligible from that date, and we intend to reimburse the mentioned £ 121million. above. This includes the repayment of £ 72million to the UK government. “

A dividend of 6.2 per year has been declared, worth £ 49million, after removing all dividend payments last year.

The company said it plans to trade from 68% of the retail space by the end of April.