Primark fattens AB Foods

ASSOCIATED British Foods' pile 'em high, sell 'em cheap Primark clothes chain put in a stellar performance in the last half-year despite the economic slowdown. Profits at Primark, Britain's second biggest lingerie retailer after Marks & Spencer, rose 23% as sales jumped 30% in the 24 weeks to 2 March.

While part of the budget operator's earnings growth was due to a rapid store-opening programme, like-for-like sales were ahead by 4%, even including the autumn tail-off in the wake of the 11 September terrorist attacks.

New stores at sites including Lewisham in London and Manchester took the chain up to 111 and more outlets are in the pipeline, the focus being on bigger units.

AB Foods chief executive Peter Jackson said: 'A lot of big towns and cities don't have a Primark yet - Liverpool, Leicester, Birmingham. If we can get good sites, we'll go there.' All eyes are on the cash-rich owner of food brands ranging from Kingsmill bread and Ryvita to Silver Spoon sugar for a flurry of corporate activity following the death of chairman Garry Weston in February.

He is thought to have retained an influence on the running of his empire even on his sickbed. Chief executive Peter Jackson said the group was sitting on £902m cash and was keen on takeovers, but he added: 'I'd rather have that money in the bank than spend it on a bad acquisition.'

He said he had seen no signs that the Weston family trusts would relinquish some of their 54.5% hold of the company's shares, although there has been speculation they may want to sell some of their equity to bid for Regent Street department store Liberty.

Group operating profits were £179m against £159m for the same half-year in 2001 after strong performances on nearly all fronts in its food operations, even though bad weather and poor crop volumes hit its agricultural interests.

'The message is: 'further evidence of good underlying growth',' said John Elston, analyst at house broker West LB Panmure.

Pre-tax profits fell to £189m from £237m because of exceptional income from disposals in the year-earlier period. A £10m decline in investment income to £23m also dented the bottom line. Turnover was up to £2.1bn from £2.06bn. The dividend is pegged at 4.25p.

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