LONDON Jan 17 Associated British Foods
said group revenue in the 16 weeks to Jan. 5 was 10 percent
ahead of last year, driven by a higher-than-expected 25 percent
increase in sales at clothing retailer Primark.
At discount retailer Primark, where new store openings also
helped sales, "like-for-like growth benefited from comparison
with weak sales during the unseasonably warm autumn of 2011 and
good trading over the Christmas period," AB Foods said in a
statement on Thursday.
"Even allowing for an easy Autumn comparison (2011 was
unseasonally warm), this performance is well ahead of
expectations," wrote Panmure Gordon analysts in a research note.
Primark, whose website boasts a women's denim shirt for 12
pounds ($19.19) and a men's hooded top for 10 pounds, has
benefited as recession-hit consumers worried about jobs and
facing squeezed household budgets hunt for bargains.
Other British retailers are suffering. The latest hit are
entertainment retailers HMV and Blockbuster, and camera
AB Foods revenues were hit by the strengthening of sterling
against all of the group's main foreign currencies except the
Australian dollar. Without the impact group revenues would have
been up 13 percent and Primark revenues up 27 percent, it said.
The company, which also sells Silver Spoon sugar and
Twinings tea, said it now expected further progress in overall
adjusted operating profit for the full year, with the
improvement heavily weighted towards the first half.
Revenues at its highly profitable sugar business were 12
percent ahead of last year in the 16 weeks to Jan. 5, on higher
sales volumes and marginally higher sugar prices, AB Foods said.
However, in the UK, poor growing conditions in 2012 led to a
lower beet yield and sugar content meaning factory throughput
would be lower, it said.
It estimated this year's production would be lower - 1.13
million tonnes compared with last year's 1.32 million tonnes -
while lower production, higher beet cost and a weaker euro would
make for a lower profit.
In Spain, the company estimated it would achieve its sugar
production quota but said it would make a lower profit because
of a higher beet cost and because this year's sales included a
higher proportion of lower-margin, refined cane sugar.