Associated British Foods (ABF) has reported a 3 per cent rise in half-year takings, with pre-tax profits for the 24 weeks to 3 March of £329m, compared to £319m the previous year.
Group revenues grew 11 per cent to £5.77bn (2011: £5.21bn) and the adjusted operating profit was 6 per cent ahead of last year at £412m (2011: £390). The first half of the year was notable for the exceptional performance from AB Sugar, a wholly owned subsidiary of ABF, and a good result from the Primark chain, which accounts for approximately a third of group earnings.
Primark's revenue grew 15 per cent to £1.62bn (2011: £1.41bn); this resulted from a 2 per cent like-for-like sales increase and an extensive programme of new store openings.
The clothing retailer operates over 235 stores in Ireland (where it is branded as Penneys), the UK, the Netherlands, Germany, Spain, Portugal and Belgium.
ABF expects to open a further six Primark stores in the second half of the year, including four in Spain, one in Germany and one in the UK.
Meanwhile, ABF's agriculture businesses achieved revenue growth, led by KW Trident’s strong sales of sugar beet feed and another excellent performance from AB Vista, the company’s international micro-ingredients feed business.
Grocery revenue increased by 4 per cent to £1.81bn (2011: £1.74bn), while operating profit declined to £75m (2011: £109m). The decline in operating profit was primarily driven by restructuring costs at George Weston Foods in Australia and Allied Bakeries in the UK, margin declines at Allied Bakeries and higher-than-expected costs of operating the Castlemaine meat factory in Australia.
Ingredients revenue increased by 2 per cent to £538m but operating profit declined to £18m.
George Weston, chief executive of ABF, said:
The group delivered good growth in revenue and profit. AB Sugar and Primark both performed strongly, demonstrating continuing momentum. We expect substantial growth in both adjusted operating profit and adjusted earnings per share for the group for the full year.