AB Foods buoyed by Primark

City A.M. Reporter
Associated British Foods forecast a "substantial" rise in full-year earnings as under-pressure British shoppers turned to its Primark discount fashion stores and it benefited from high sugar prices in the first half of its financial year.

The London-based food and retailing group said earnings per share rose five per cent to 34.4 pence in the 24 weeks to 3 March compared to a forecast of 33.5 pence from a Reuters survey of eight brokers.

The half year dividend rose eight per cent to 8.5 pence a share.

"AB Sugar and Primark both performed strongly, demonstrating continuing momentum. We expect substantial growth in both adjusted operating profit and adjusted earnings per share for the group for the full year," said group Chief Executive George Weston in a results statement.

The Primark chain, which accounts for around a third of group earnings, saw half-year profits rise as shoppers looked for bargains, while profits at its sugar business rose sharply as it gained from higher prices in Britain, Spain and Africa.

Primark's 233-store chain showed a 15 per cent rise in half-year revenue helped by a like-for-like sales rise of two per cent and its new store opening programme, and expects its current rate of store expansion to continue.

In its second half, the group expects to open four new stores in Spain, one in Germany and one in Britain.