Primark drives AB Foods first half profits

Associated British Foods forecast first half results ahead of its expectations at the start of the year, driven by the performance of its Primark discount fashion chain.

The firm said on Monday adjusted operating profit for the half to March 2 will be higher than the previous year, with earnings per share "substantially ahead".

AB Foods said Primark's first half sales were expected to be 23% ahead of the same period last year, with sales at stores open over a year up 7%.

The group said Primark's profit margin was also much higher, reflecting the benefit of lower cotton prices and better trading.

"Our expectation for the full year is unchanged and earnings growth for the full year will therefore be heavily weighted towards the first half," added the group, noting stabilisation in the performance of its sugar, grocery and ingredients businesses.

Shares in AB Foods, which have increased by a half over the last year, closed Friday at 1,830 pence, valuing the business at 14.5 bln pounds ($22.14 bln).