Primark’s robust Christmas trading makes up for sugar losses by chain’s owner

ROBUST Christmas trading at Primark, the discount fashion chain owned by Associated British Foods, helped to make up for falls in revenue at the group’s sugar business in the first quarter, which will weigh on full-year earnings.

AB Foods said yesterday it expected a marginal decline in adjusted earnings per share for its 2014-15 year from the 104.1 pence made in 2013-14. Growth at Primark and progress at its grocery, ingredients and agriculture busi- nesses would offset sugar, hurt by a fall in European Union sugar prices and weakness in the world sugar price.

Sales from the company’s 287 Primark stores were up 15 per cent in the 16 weeks to January 3, partly a reflection of strong trading over the last five weeks of that period, which included Christmas. Primark contributes about half of AB Foods’ profit.

Analysts estimated a samestore sales rise of about four per cent for the five-week festive period, much stronger than Christmas trading performances at rivals Marks & Spencer and Debenhams.

Discount fashion chains such as Primark have benefited from consumers’ efforts to keep a tight grip on spend- ing against a backdrop of muted growth in disposable income.

Finance Director John Bason said trading at the five stores Primark opened in France last year was “sensational”, though he noted Primark’s overall operating margin in the period was, as expected, lower than last year due to more mark-downs.

ABF’s total group revenue in the 16 weeks to January 3 rose three per cent at constant exchange rates.