WINNING WAYS

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

AB Foods expects full-year sales at Primark to rise 13 per cent on a constant currency basis, with the UK seeing particularly strong turnover growth of 10 per cent. Like-forlike sales are forecast to come in 1 per cent higher at the fashion chain.

The retailer said that strong Easter trading helped drive sales, which meant less in the way of discounting. “After a good first half, third-quarter trading was particularly strong in the lead-up to Easter, benefiting from comparison with prior year results that were affected by poor weather and an earlier Easter holiday.

“Favourable weather in the fourth quarter and the strength of our consumer offering resulted in markdowns at lower levels than normal,” AB Foods said in a trading update yesterday.

As a result, the group, which also has a sugar and grocery business, said its outlook

0 Primark has been rolling out an ambitious store opening programme

“The Primark owner has come up with the goods yet again, issuing another profit upgrade after nervous consumers kept opting for low-cost fashion.”

FIONA CINCOTTA, ANALYST is “further improved” and adjusted operating profit will be “well ahead of last year”.

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

The group said the Brexitinduced slide in the pound will see it benefit to the tune of £85 million this year.

However, AB Foods again noted that the British currency’s demise against the dollar has led to higher import costs at Primark, which meant its first-half profit margin falling.

Fiona Cincotta, a senior market analyst at Cityindex.co.uk, said: “The Primark owner has come up with the goods yet again, issuing another profit upgrade after nervous consumers kept opting for lowcost fashion.

“The new guidance for a rise in second-half margins at Primark is particularly pleasing, as is the expectation that margins will hold steady next