Stellar Primark growth offsets falling sugar sales at AB Foods
ASSOCIATED British Foods (ABF) said yesterday that first half profits will be in line with forecasts after a standout performance at its clothing chain Primark helped offset falling profits at its sugar business.
Sales at Primark, which launched its first two stores in France in the period, were up 13 per cent, driven by new store openings and a four per cent rise in like-for-like sales.
Chief executive John Bason said underlying sales were weak in the first eight weeks of the year because of the warm weather and the tough comparatives but rebounded over Christmas and the New Year.
Selling space rose eight per cent as Primark opened 16 stores including two new stores in the Netherlands and one each in Germany, Austria and Portugal, which Bason said had all traded “exceptionally well”.
But while Primark flourished, ABF said first half revenues and profits in its sugar division would be lower than expected because of falling European sales as well as pressure on world sugar prices.
Bason also warned that the strengthening sterling would have an impact when translating overseas results in the second half.