Associated British Foods profits increase on Primark sales

Associated British Foods (ABF) reported a 10 per cent rise in half-year revenue driven by sales at its clothing retail subsidiary Primark.

Group revenue came to £6.3bn for the six months to March 2nd, and adjusted operating profit was 20% ahead of the previous year at £496m.

Adjusted profit before tax climbed by 25% year-on-year to £495m while adjusted earnings per share increased 22% to 41.9p.

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The FTSE 100 company said results were boosted by Primark with sales up 24% higher than the year earlier.

"Trading in the period was very strong, the profit margin was much improved, customers in continental Europe have taken enthusiastically to the Primark brand and there is very real momentum in the addition of selling space," the group said in a statement.

ABF's sugar business delivered an underlying profit increase as weather-related challenges at European operations were well managed and its Ilovo arm achieved record production in Zambia following factory investment.

Grocery profit also improved on the back of a non-recurrence of restructuring costs taken last year.

Agriculture achieved strong performance from UK feeds and focus on value adding areas of the business. Headline profit at ingredients was in line with last year.

The firm declared an interim dividend of 9.35p, an increase of 10% on last year.

In the year ahead, ABF expects low growth in the face of a tough economic climate. Profit at Primark is forecast to rise but not at the same level of the first half which benefit from lower cotton prices.

"With this in mind we remain focused on delivering operating efficiencies and maximising the return on investments made by the group over recent years," the group said.

"We continue to pursue growth opportunities in developing markets."

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