Profits boost as ABF sees strong signs of recovery

Retail and food group ABF, which also makes Silver Spoon sugar and Kingsmill bread, added despite uncertainty surrounding the UK economic outlook, it believes the global recovery is underway.

Each of its divisions grew revenues, and ABF said it is confident of growing earnings further for the full year.

Chief executive George Weston said: "The global economic recovery is underway, there are strong signs in the US and China is growing strongly."

ABF's chain of 196 Primark stores saw an eight per cent rise in like-for-like sales, and it has since opened another five. Total sales, aided by new openings, were up 19 per cent, with profits up 18 per cent at 144m.

The group has 11 stores in Yorkshire, and plans six more openings across the UK and Spain this year to capitalise on consumers' desire for low-cost fashion. It recently bought 10 BHS stores from Arcadia, giving it another 300,000 sq ft of selling space.

ABF said Primark's performance was driven by exceptional trading at its 14 Spanish stores.

Underlying pre-tax profits of 331m in the 24 weeks to the end of February beat analysts expectations of 315m. Group revenues were 10 per cent ahead at 4.8bn.

"The investments made in recent years are now delivering very satisfying returns," said Mr Watson. "Our sugar business has been transformed, our brands and marketing strategies are driving growth in grocery, the broad geographic base continues to drive momentum in ingredients, and Primark goes from strength to strength."

Its grocery arm grew profit 53 per cent to 95m, with its Twinings and Ovaltine drinks brands delivering strong sales. Silver Spoon was boosted by demand for home baking ingredients.

Profit from its sugar division was 39 per cent ahead of last year at 85m.

ABF is part of a joint venture building a 200m biofuel plant at oil giant BP's chemicals site at Saltend near Hull.

Alongside BP and United States chemical company DuPont, ABF is part of a consortium called Vivergo, which will derive bioethanol from wheat.

Wakefield-based engineering support services firm Redhall is working on a 30m contract to build and install pipework at the plant.