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Last Updated: Tuesday, 6 November 2007, 10:17 GMT
Primark drives AB Foods profits
Shoppers outside the entrance of the Primark store on London's Oxford Street
Primark annual operating profit rose 20% in a testing environment
Associated British Foods, the Primark clothing chain owner, said profits rose 10% after further strong growth at the discount fashion stores.

AB Foods reported that adjusted pre-tax profit rose to 613m ($1.3bn) in the year to 15 September.

Primark annual operating profit went up 20% to 200m. Profits were also lifted by the group's sugar operations.

It offset a poor UK showing from the Kingsmill bread business, hit by the high cost of wheat and weaker dollar.

The group earns a fifth of its profits in the United States.

'Further progress'

Primark said its stores had started the autumn season well, after suffering from price discounting through the wet summer months in Britain.

"The high street had a good start to the autumn, and so did we," said AB Food chief executive George Weston.

High commodity costs will continue to put pressure on margins, but we are seeing some success in recovery through prices
Martin Adamson, AB Foods chairman

AB Foods chairman Martin Adamson expects the company to make further progress this year, despite the reform of the EU sugar regime, set to have a further negative impact on profits.

"High commodity costs will continue to put pressure on margins, but we are seeing some success in recovery through prices," he said.

AB Foods employs 85,000 people in 43 countries, with its operations generating sales of 6.8bn in the last financial year.

SEE ALSO
AB Foods buys curry firm Patak's
29 May 07 |  Business
Sugar price setback for AB Foods
11 Sep 06 |  Business
Sugar costs hit Associated Foods
19 Apr 06 |  Business
Primark boosts AB Foods profits
08 Nov 05 |  Business

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