Primark shines as AB Foods beats forecasts

20th Apr 2010 06:57

The Primark clothing chain was once again the star of the show when Associated British Foods reported better than expected first-half profits.Group pre-tax profit came in at £330m in the 24 weeks ended 27 February compared with £178m last year and better than expectations of around £317m. Revenue rose to £4.8bn from £4.4bn previously, while the interim dividend is up 10% at 7.6p.Half-year figures got a boost from Primark's 8% rise in like-for-like sales, a recovery in the group's China sugar business and the absence of losses on vegetable oil futures incurred in the US last year, though the weakness of sterling had an adverse effect on the cost of imports. Primark's revenues increased 19% to £1.3bn and profits were ahead 18% at £144m. Profits from the often overlooked sugar division were 39% higher than last year driven by a strong performance in the UK and a recovery in China. Chairman Charles Sinclair said: "At the Annual General Meeting in December we expressed a concern that the pace of economic recovery and the outlook for the UK consumer remained uncertain." "Whilst we remain of this view, some easing of these pressures in the short term is evident in these results. Encouraged by the success to date and the strong momentum of the business into the second half, we are currently confident of achieving very good progress in earnings for the full year."