LONDON: Associated British Foods posted a 12 per cent increase in profits for the fiscal, aided by a 30 per cent rise in profits of its Primark discount clothes stores. Sales went up 9 per cent to 5.6 billion pounds.
The food and retail chain, which makes Silver Spoon sugar and owns the Primark, said pretax profit increased to 590 million pounds in the year to September 17. Analysts had expected 584-593 million pounds profits. Net income, however, fell to 333 million pounds from 342 million pounds in the prior period.
The company's chief executive George Weston said the Primark chain has been "spectacularly successful". He added that he was confident to offset increased cost pressures seen across the whole group.
The company is 55 per cent-owned by Weston. On Tuesday's trading, where its share price dipped 0.9 per cent, it had a market value of just over 6.4 billion pounds.
The company, Europe's fifth-largest food producer, had spent 1.5 billion pounds in acquiring food ingredients business Burns Philp and Littlewoods stores and in other investments. The company is planning to keep 41 of the 120 Littlewoods stores, while half of the remaining 79 had already been sold. The company hopes to get 200 million pounds for the total package for sale.
A quarter of the company's profits came from Primark, whose sales went up 17 per cent. Primark had a fire at its main warehouse in central England last week, which destroyed half of its stock.
Profits from sugar business were down while food and agriculture business saw flat returns. However, profits at its Twining tea and Ovaltine grocery business were 18 per cent ahead.
The foodmaker intends to expand further in Asia with its acquisition of the Burns Philp business. It is also spending 200 million pounds to expand its factory base in China, while plans are on to set up two Primark stores in Madrid, Spain next year.
Posted
on : Wed, 09 Nov 2005 08:40 GMT | Business News
By : Paula Jenkins
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