Associated British Foods, owner of Primark and British Sugar, is gearing up to report a jump in profits this week as its clothing chain continues to improve its share of the UK fashion market.
For the full year, analysts are expecting pre-tax profit to come in at £1.33bn, a rise of 25 per cent from £1.06bn the year before. ABF is also forecast to hike its dividend from 36.75p to 41.84p.
"Shares in the Primark owner have rallied strongly and are back near their 12-month highs after a series of profit forecast upgrades due to helpful currency movements and strong floor-space growth and lower-than-expected markdowns in the fashion business, which is expanding rapidly overseas," said Russ Mould, investment director at AJ Bell.
ABF said in July that the business was seeing a material benefit from the devaluation in sterling. In addition, Primark is cashing in as the squeezed UK consumer turns to discount retailers for both essential and non-essential goods. ABF told investors in September that its share of the UK market has risen significantly.
Analysts are also looking out for an update of Primark's operating margin, which is expected to increase, as well as any benefits accrued from a rise in prices for its sugar division.