Primark keeps AB Foods on track

Associated British Foods confirmed that it is on track for substantial growth in full-year adjusted operating profit and adjusted earnings per share after a strong performance from its discount fashion chain Primark boosted year-to-date revenues.

The London-based food and retailing group said that revenues rose 11 percent in the 40 weeks to 23 June, or 12 per cent at constant currency exchange rates.

The group, which also sells Silver Spoon sugar and Twinings tea, said that Primark enjoyed good trading in the latest quarter in the UK and Ireland despite poor weather keeping shoppers off the high streets in April.

Primark revenues were up 16 percent in the year to date at constant currency rates, as it opened more stores and like-for-like sales grew. The rise was 14 percent at actual rates, hit by the weakening euro.

In the sugar business, year-to-date revenues rose 28 per cent. The group said that the recent commercial environment had been strong in Europe and to a lesser extent Africa, but prices in China had continued to fall since the half-year.

AB Foods' grocery business - where year-to-date revenues rose 3 per cent - faced fierce price competition because of pressure on UK household incomes, though the Silver Spoon sugar brand received a boost from home-baking for street parties over the Diamond Jubilee holiday weekend.

In April the group had forecast a "substantial" rise in full-year profits.

Net debt at 23 June, 2012, was below £1.4bn,lower than the third quarter last year, having dropped by more than 200 million pounds since the half-year. The company said it expects a further reduction by year-end.