Primark sees Christmas sales rise thanks to store expansion

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Looking ahead, AB Foods kept its annual outlook unchanged with adjusted operating profit and adjusted earnings per share expected to be in line with previous year.

Overall, AB Foods, which also owns a sugar business and grocery business including Twinings and Ovaltine, saw revenues rise 2% on a constant currency basis in the 16 weeks. GVC also gained 2.1 percent after saying it expected full-year earnings to be ahead of market consensus thanks to strong growth in its online business.

Sales at Primark were 4% ahead of past year, at both constant currency and actual exchange rates, and with a higher operating profit margin, profit was well ahead.

AB Foods said Primark, which accounts for about half of the group's revenue and profit, increased its total sales by 4% at constant currency, though like-for-like sales saw "a modest decline".

Primark's share in the clothing market in the United Kingdom increased significantly, and ABF pointed out that Germany is a "difficult" market while the U.S. market is "strong", "Nick Bubb, an independent retail analyst, explained in a market note".

Primark recorded higher operating margin and in the period "profit was well ahead", AB Foods added.

'Like-for-like sales in September and October were ahead but reduced footfall affected sales in November.

Group revenue from continuing operations for the 16 weeks was 2pc ahead of the same period a year ago at constant currency, while sales from continuing operations at actual exchange rates were 1pc ahead.

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Growth was strong in France, Belgium, Italy and Spain, but sales suffered amid a challenging environment in Germany, the company said.

We are pleased with the strong United States performance in the period. Sales were well ahead and benefitted from very strong trading at the Brooklyn store, which opened in July past year.

Sales in the group's grocery division, which includes Twinings, were 2pc ahead of past year at actual exchange rates, while operating profit margins on an underlying basis improved. The ratio has dropped, as 86 hedge funds increased and opened new equity positions, while 52 decreased and sold their equity positions in Lacrosse Footwear Inc.

It expects to open another 600,000 sq ft during this financial year with a greater presence in New Jersey, Birmingham and Slovenia.

However, revenue from sugar was 12 per cent behind the same period past year at constant currency (14 per cent at actual exchange rates).

However, the company said: "Looking ahead, the development of our sales book for this year has indicated early signs of recovery in European Union sugar prices".

The UK campaign is progressing well and production will now be 1.15 million tonnes as a result of higher sugar content in the beet. This is due to ongoing pressure from falling sugar prices and a generally falling sweet tooth across the eurozone.

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