Primark sales boost shares in AB Foods
STRONG demand for cheap clothes yesterday prompted Primark owner Associated British Foods to hike its full-year earnings forecasts.
AB Foods finance director John Bason said Primark like-for-like sales rose by seven per cent in the six months to 12 September, in contrast to declining sales at high street rivals such as Marks Spencer and Next.
Primark, which accounts for almost a third of the group’s business, has become the retail star of the downturn, reporting repeated sales growth as shoppers flock through its doors to snap up cheap goods.
AB Foods, 55 per cent owned by the family of chief executive George Weston, said it now expected “some progress” in adjusted earnings for the year ending 12 September, compared with its previous forecast for a flat outcome.
The news prompted analysts to rush through upgrades on the stock, sending the share up 4.13 per cent to 845.5p. Shore capital analyst Clive Black said: “After a sustained period of investment in acquisition and organic development… ABF may be on the threshold of delivering rising earnings growth, capital returns and dividends,”
Growth was also driven by a big rise in profits at the group’s sugar and agriculture business.
ABF, which owns the Silver Spoon brand, said it received £120m from the sale of its Polish sugar business earlier in the year, which will result in a further reduction in the group’s debt pile.