AB Foods reports Primark sales growth

Associated British Foods today said growth at discount clothing retailer Primark will help offset falling sugar profits and debt costs.

The firm is anticipating higher annual operating profits after Primark enjoyed like-for-like second-half sales growth of 2% and launched eight stores.

But AB Foods, which is due to announce full-year results in November, warned it will be squeezed by debt from acquisitions and low sugar prices due to a bumper Chinese crop.

Panmure Gordon stockbrokers estimated Primark’s like-for-like sales growth accelerated to 4% in the fourth quarter of the financial year, following flat growth in the previous quarter because of poor weather and the timing of Easter.

The broker maintained its forecast for group profits at £630m (€783m).

In the group’s grocery arm, which trades household names such as, Allinson, Kingsmill, Mazola, Ovaltine and Ryvita, AB Foods said revenues and profits growth was strong in the second half.