Associated British Foods (ABF.L) said total sales at discount fashion store Primark climbed 11 percent in the 16-week Christmas period as it stuck to a forecast to make progress in group annual operating profit. Even ignoring the foreign exchange tailwinds, revenues were still up 10% on an actual exchange rate basis. As last year was a 53 week year, sales on a comparable week basis at constant currency were 12% ahead and 23% ahead at actual exchange rates.
AB Foods said that on a constant currency basis sales at Primark were 11 percent higher in the 16 weeks to January 7 compared to the previous year, as it opened more shop space.
In the UK, Primark reported "good" underlying sales and growing market share, saying stock was well-managed in the period.
Like-for-like sales for the group were held back by declines, albeit smaller than previous year, in Germany and the Netherlands, the latter particularly affected by the rapid increase in selling space.
New stores opened in the period traded strongly and the Primark business in the USA continued to develop.
As expected though, operating margins will decline as the year progresses reflecting the strength of the U.S. dollar on input costs.
Meanwhile in the smaller grocery and agriculture divisions, AB Foods said its Twinings tea brand, part of the grocery arm, continued to achieve strong sales, while revenue in agriculture was higher than a year ago.
A global deficit in sugar, which is expected to continue throughout this year as well, helped push prices higher while AB Sugar also upped its production and output in Africa. That figure is nearer to 40% if you take into account the benefits realised from a strengthening U.S. dollar.
"Tax of some $100m will be payable on the transaction in the current year". AB Mauri and ABF Ingredients both achieved good revenue growth and margin will again show substantial improvement.
The company, which houses the Twinings tea and Ovaltine brands, said its outlook for the full year remains unchanged with progress expected in group adjusted operating profit and adjusted earnings.