The £121m claimed in furlough money under the government job retention scheme will be paid back, Primark bosses have said; a dividend will also be paid to shareholders despite a slump in profits.

Associated British Foods (ABF) have said the decision comes despite stores being closed for most of the autumn and winter period, resulting in profits plunging.

Sales were down 17% to £6.3 billion and adjusted operating profits fell 50% to £319 million in the six months to February 27.

However, chief executive George Weston is confident that stores will become cash generative following the easing of restrictions in England and Wales, which makes up 40% of Primark selling space.

He said: "We are excited about welcoming customers back into our stores as the lockdowns ease and are delighted with record sales in England and Wales in the week after reopening on April 12.

"With our success in a number of new markets, as wide-ranging as Poland and Florida, we are as convinced as we have ever been in the long-term growth prospects for Primark."

Mr Weston confirmed that the company had claimed a total of £121m to support the 65,000 employees working at the fashion brand.

Chairman Michael McLintock added: "Although uncertainty remains, a large proportion of the UK adult population has now been vaccinated and last week we saw the successful reopening of Primark’s English and Welsh stores which represent some 40% of our total retail selling space.

"On the assumption that our English and Welsh stores remain open, Primark will return to cash generation.

"Accordingly, we do not plan to make any further claims from government job retention schemes for which we would be eligible from this date, and we intend to repay the £121 million referred to above. This includes the repayment of £72 million to the UK government."

A dividend of 6.2p a share was declared, worth £49 million, having scrapped any dividend payments last year.

The company said it expects to be trading from 68% of selling space by the end of April.