Primark helps AB Foods lift its revenues

 
Kasmira Jefford
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DISCOUNT fashion chain Primark hailed strong sales during the festive period, helping its parent company Associated British Foods (ABF) post a rise in first quarter revenue.

The FTSE 100 company, which also owns brands including Silver Spoon sugar and Twinings tea, said a 16 per cent growth in sales at Primark helped boost group revenues by 12 per cent in the 16 weeks to 7 January.

Finance director John Bason said: “The autumn was slow because of the unseasonably warm weather but certainly over the Christmas period we saw very strong trading.”

Analysts have estimated like-for-like growth of around three per cent.

While its high street peers are having to scale back their stores amid tough trading conditions, Primark, which runs 232 stores, plans to press ahead with its European expansion, including three new stores in Spain in the second half.

“We have a big pipeline of stores in continental Europe and we will open as many of those as we possibly can – floor space growth for the full year will be about ten per cent,” Bason said.

Higher cotton costs hit the retailer’s operating margins during the quarter, but ABF noted that prices had fallen from their peak and predicted it would start to see the benefits in the second half.

ABF, one the world’s largest sugar producers, said continuing high sugar prices have helped lift revenues at its sugar division by 21 per cent.