AB Foods share price leaps on Primark success

Kasmira Jefford
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BUDGET fashion retailer Primark – the jewel in Associated British Foods’ crown – has continued to sprint ahead of its high street rivals by reporting a 24 per cent jump in half year sales.

The chain reported £2bn of sales in the six months to 2 March, while like-for-like sales – which strip out store openings – rose seven per cent.

Unlike its high street competitors bolstering their online businesses to shore up sales, Primark continues to hold out against selling online in favour of expanding its stores.

ABF chief executive George Weston said: “Our priority is to get high street space open in these new markets and get the right space in the UK...we keep an eye on online trading but we clearly don’t have to do it at the moment.”

Primark opened 15 new stores in the first half – in Spain, the UK, Austria, the Netherlands and Germany – taking its total estate to 257 stores. It plans to embark on a further expansion drive next year by moving into France.

The retailer’s strong performance helped lift pre-tax profits at ABF by 25 per cent to £452m, beating expectations. Sales rose 10 per cent to £6.3bn.

ABF’s grocery division, whose brands include Twinings, saw profits rise nine per cent, while its profits at its sugars division fell five per cent – less than feared – thanks to higher volumes and prices.