AB Foods delivers rise in profits

ASSOCIATED British Foods beat forecasts with a 20 per cent rise in first half profit, driven by a stellar performance from its Primark clothing chain and a recovery in its grocery division.

The firm said it had made underlying operating profit of £496m in the six months to March 2.

That compared to analysts’ average forecast of £485m and was up from £412m in the 2011-12 half year. Revenue increased 10 per cent to £6.33bn.

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Many British retailers have been finding the going tough as consumers fret over job security and a squeeze on incomes.

Primark, with its focus on low prices, has been one of the few to buck the gloom. Its sales rose 24 per cent, helped by 15 new store openings. Sales at stores open over a year increased seven per cent.

AB Foods’ underlying earnings per share rose 22 per cent to 41.9 pence and the firm is paying an interim dividend of 9.35 pence, up 10 per cent.

It said it expected to make “good progress” in its full year.

The group forecast strong profit growth from Primark, although not at the same level of the first half which had the benefit of lower cotton prices, and an improvement in grocery.