Primark sales boost AB Foods
Associated British Foods has posted a 17 per cent rise in full-year profit after what it termed an "exceptional performance" in its sugar operations and at its Primark discount clothing stores.
Primark grew revenue by 17 per cent at constant exchange rates, meeting analyst expectations.
"The fact that they delivered on Primark margins will be well received," said Dirk van Vlaanderen, an analyst from Jefferies.
"That's definitely the big bright spot of the business," he added.
Primark's operating profit margin was 10.2 per cent, level with its results a year earlier.
Primark has been one of the best performing stores on shopping streets in Britain, Ireland and Spain thanks to its low prices and quick adoption of fashion trends.
The company said it did not expect subsidiary AB Sugar to perform as strongly in the year ahead, as a result of lower EU production, but it would be more than offset by further growth at Primark and some recovery in its grocery business.
"The outlook is realistic. The sugar will be down but if they can hold that Primark margin then I think that should be fine," Mr van Vlaanderen said.
AB Foods will continue expanding Primark across Europe, defying weak consumer sentiment that has blighted many peers as consumers hunt for bargains.
Chief executive George Weston said the group's pace of expansion in countries such as Spain, where it has built 16 new stores in the past 15 months, was likely to remain high.
Shares in AB Foods were up 0.4 per cent at 08.25 GMT to 1,372 pence.