ASSOCIATED British Foods yesterday forecast a significant rise in full year profits, fuelled by its Primark chain and sugar business.
The food and retail group said earnings in the six months to 3 March rose by five per cent with higher sugar prices giving the FTSE 100 group momentum.
The company, whose brands include Silver Spoon sugar, Twinings tea and Kingsmill bread, said it expects growth to pick up in its second half, with falling cotton prices aiding Primark in particular.
Sugar profits rose 59 per cent helped by strong prices in Britain, Spain and Africa.
Primark, which accounts for a third of company earnings, saw like for like sales up two per cent and profits up three per cent to £363m.
The retailer’s profit margins were trimmed 1.2 points to 9.5 per cent, but Weston said he expect them to rise in the second half as cheaper cotton prices feed through. The store’s profits fell last year due to higher cotton prices.
Chief executive George Weston said: “It has been a good start to the year with a lot more to come in the second half. The UK retail scene is tough but we are more than holding our own and we are confident the year will be good.”
Weston said the group may get a boost in the UK from the Queen’s Diamond Jubilee and Olympic Games this summer but he saw a difficult trading environment with relatively high inflation, ongoing austerity measures and job cuts.
The firm’s half-year dividend rose eight per cent to 8.5p a share.