Boost for Primark as sales set to be soaring ahead by 15%
Budget retailer Primark showed no evidence that its storming Christmas performance resulted in a New Year sales hangover.
The chain's owner Associated British Foods said Primark's trading this year had been good, particularly in light of the economic climate.
Fuelled by nine store openings in the first half of its financial year, AB Foods said its retail sales for the six months to March 3 are expected to be 15% ahead of last year, with like-for-like sales up 2%.
The update comes a month after AB Foods reported an 'exceptional' Christmas at Primark's 232 stores, with trading much improved on a sluggish autumn.
It offered further encouragement as falling cotton prices mean it will see the benefit of lower input costs in the second half of the year.
Two of the stores openings were in the UK, including a flagship store on Princes Street, Edinburgh before Christmas. It also relocated the store in the Metro Centre, Gateshead and extended an outlet in Bexleyheath.
Across the group, which also trades in sugar and owns the Kingsmill bread and Twinings Ovaltine businesses, half-year profits are in line with hopes.
Improved weather conditions and higher prices means profits in the UK sugar business should be well ahead of last year.
UK sugar production is now estimated to be 1.3m tonnes compared with just under 1m last year. At Allied Bakeries, Kingsmill grew revenues in the period but strong competition driven by the need for promotions affected profit margins. It continued to invest in the business following the launch of a new bread line at a bakery in Stockport.
AB Foods added that Twinings Ovaltine continued to perform 'very well' with strong demand for tea in the United States and for Ovaltine in developing markets.
The UK grocery businesses of Silver Spoon, Westmill Foods, Jordans Ryvita and its Patak's Indian cuisine arm AB World Foods traded in line with expectations and generated profits similar to a year earlier.