Sales boost at Penneys lifts revenue for Associated British Foods
PRIMARK and Penneys owner Associated British Foods (ABF) posted a 10pc rise in group revenue during the 16 weeks to January 8, in line with market expectations.
However, the shares slipped as it warned that although 75pc of UK sugar beet has been processed, the remainder has been damaged by cold weather and its quality is still being assessed.
Analysts at Panmure Gordon in London estimated that the beet damage could result in a £20m (€24m) cost to ABF.
ABF, which also owns brands such as Ryvita, Kingsmill and Twinings, said that sales at Primark rose 12pc in the period under review, despite the bad weather that hit other retailers.
It said the growth reflected "good" like-for-like sales and an increase in retailing space.
ABF has 214 Primark stores, while its European expansion of the brand continued apace, with two outlets opening in the Canary Islands, another in Germany and one in the Netherlands.
"Operating margin was higher than the same period last year but, as previously highlighted, this is expected to come under pressure primarily in the second half when the increase in VAT in the UK, which was effective from January 4, combines with the effect of higher cotton prices," the company said in a statement.