AB Foods riding high with Penneys

Associated British Foods beat forecasts with a 20pc rise in first half profit, driven by a stellar performance from its Primark clothing chain and a recovery in its grocery division. The firm said today that it had made underlying operating profit of £496m sterling in the six months to March 2.

Compared to analysts’ average forecast of £485m and was up from £412m the same time half year. Revenue for the six month period increased 10pc to £6.33 billion according to an RTE News report. Primark trades as Penneys in Ireland.

Its sales rose 24pc, helped by 15 new store openings. Sales at stores open over a year increased 7pc. Many British retailers have been finding the going tough as consumers fret over job security and a squeeze on incomes. Primark, with its focus on low prices, has been one of the few to buck the gloom.

AB Foods’ underlying earnings per share rose 22pc to 41.9 pence and the firm is paying an interim dividend of 9.35 pence, up 10pc. The company said it expected to make “good progress” in its full year. It forecast strong profit growth from Primark, although not at the same level of the first half which had the benefit of lower cotton prices, and an improvement in grocery. The group said these factors would more than offset a reduction in profit from sugar as a result of lower EU production and lower prices in China. Source: RTE.