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Last Updated: Tuesday, 8 November 2005, 10:37 GMT
Primark boosts AB Foods profits
Primark store
The discount chain is capturing a growing slice of High Street sales
Strong sales at discount clothes chain Primark have lifted annual profits at parent firm Associated British Foods.

The group, which also owns the Ovaltine drink, Ryvita crispbread and Silver Spoon sugar brands, saw profits to 17 September rise 12% to 590m.

Profits at Primark increased by 30% to 108m, as sales rose 17% to 1bn.

AB Foods plans to expand the 122 store Primark chain by adding 41 stores acquired from Littlewoods and Allders as part of a 1.5bn investment plan.

The company's grocery business also performed well, with sales up by 7% to 2.6bn and profits ahead 18% at 188m.

But trading was more difficult at the bakery division despite the relaunch of premium brand Kingsmill Gold.

Chief executive George Weston said Primark had been "spectacularly successful" and that there would be no long-term effects of a fire which destroyed the group's main warehouse in Leicestershire, although "some limited disruption" was expected.

Shares fall

Nevertheless, shares in AB Foods fell on the London stock market after the results were announced as analysts anticipated a year of consolidation and low growth after a spate of acquisitions.

Shares fell 1.7% to 803p, valuing the group at 6.4bn. The Weston family owns 55% of the shares.

The company said it hoped to raise 200m by selling off the remaining Littlewoods stores it had acquired.

And it plans to increase the dividend by 10% to 18p per share.


SEE ALSO:
Clothing sales boost for AB Foods
10 Nov 04 |  Business
ABFoods shows appetite for profit
14 Apr 04 |  Business


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