REACTION

Primark owner Associated British Foods has upped its full-year outlook after being boosted by strong sales at the low-cost fashion chain and the Brexit-hit pound.

AB Foods said yesterday that revenues rose 13 per cent on a constant currency basis and 20 per cent at actual exchange rates in the third quarter, driven by increased profitability at Primark.

The cut-price retailer shrugged off tough high street trading hitting some rivals as it benefited from strong Easter trading and warm weather, with its UK turnover up 9 per cent in the year to date.

Primark sales are 13 per cent ahead in the year so far at constant currency, and 21 per cent at actual exchange rates.

Shares in AB Foods, which also has a sugar and grocery business, received a lift after the group said the bumper third-quarter had “marginally improved” its outlook for the full-year.

It said: “The results to date reflect a material translation benefit from the devaluation of sterling following the result

0 The chain is growing its presence with new stores opening overseas

NICK BUBB, CONSULTANT of the UK referendum on EU membership in June last year.

“The underlying operating performance of the group during the third quarter was ahead of our forecast as a result of a stronger profit delivery from Primark which has marginally improved our group outlook for the full year,” it added. The group said the fillip from the pound would be “significantly less” in its fourth quarter.

AB Foods – which also generates revenue in Asia, Europe and the Americas and owns Twinings tea, Kingsmill bread and Silver Spoon – has benefited from sterling’s slide following last year’s referendum vote.

But it also noted a fall in profit margin caused by higher import costs as a downside of the pound’s weakness.

Nicholas Hyett, equity analyst at financial services firm Hargreaves Lansdown, said: “Currency headwinds may be hitting margins, but Primark’s disposable fashion at amazing prices remains popular with shoppers across Europe, with

“The trading update from the sprawling conglomerate ABF is upbeat about the ‘jewel in its crown’, namely mighty Primark.”