Fashion & sugar combine to boost growth at Penny’s parent company
Associated British Foods, the group behind clothing giant Primark/Penny’s today announced first-half profit of £652m (€773m), up 36pc.
The profit is largely driven by growth in the company’s clothing and sugar lines of business.
Clothing sales for the company are up 21pc to £3.2bn. However its operating margin is down 2pc to £323m in constant currency terms due to an increase in the company’s sourcing costs from the strong dollar.
Primark continued its expansion during the period, opening 16 new stores in eight countries.
The company now was 329 stores world-wide including 37 in the Republic of Ireland.
Sugar continued to be a major area of growth for the company, with its subsidiary AB Sugar recording an increase in revenue of £1,081m for the period, a year-on-year increase of 33pc.
Operating profit for the sugar subsidiary increased to £123m from £3m in the prior year period, with all regions benefiting from either higher prices, increased volume, or both.
“I said in my statement in last year’s annual report that 2016 would be seen as a turning point for AB Sugar. Our sugar businesses were the largest single driver of the group’s underlying profit improvement in the first half [of this year],” group chairman Charles Sinclair said.
Meanwhile the groups grocery division also saw operating profits increase to £151m, up 20pc. Goods under the AB Foods brand include Twinings, Ryvita, Blue Dragon, and Ovaltine.
In 2015-2016 AB Foods made an adjusted operating profit of £1.12bn.
“Primark delivered a substantial increase in selling space, which together with a strong consumer offering, contributed to a further increase in our share of the total clothing market. Furthermore we achieved a more acceptable rate of return in sugar and further progress was made by our ingredients and grocery businesses”, George Weston, chief executive of Associated British Foods said.
AB Foods currently employs 130,000 people across 50 countries in Europe, southern Africa, the Americas, Asia, and Australia.
The group has 9.5m followers on social media – a number that is growing by over 100,000 per month.