Primark's the star as AB Foods hits £613m

But chief executive George Weston, while saying he is confident of future growth, cautioned that Primark will advance at a slower rate in the coming year than the last two and that the sugar business faces a drop in profits as the European Union finally resolves it trading regime.

Primark recently became the UK's second-largest clothes retailer with a 9% market share, after Marks & Spencer with 11%. In the past 18 months, the group has taken over and reopened 41 former Littlewoods stores and opened a flagship store in Oxford Street. That sold more than onemillion items in its first 10 days of trading.

Revenues at Primark jumped 37% from £1.17 billion to £1.6 billion in the year to 15 September with operating profits up from £166 million to £200 million. Themargin is 12.5%.

Weston said like-for-like sales rose 1% but, adjusting for old stores affected by new openings, underlying growth was 7% - particularly strong given the poor summer weather that hit all retailers. There was also a bigger-than-usual end-of-summer sale as the stores cleared space for autumn ranges. Nine stores will open in the UK in the coming year.

"The weather has definitely turned much more friendly now," said Weston, who declined to forecast how the run-up to Christmas might look but added: "We've traded well through downturns before but we've also traded well through boom times."

He is particularly pleased by Primark's move into Spain, where it will add another five stores to the existing two opened last year. He denied this was taking on rival fashion chain Zara head-to-head in its home market, saying: "Both of us drive footfall strongly, and our ranges and pricing levels are actually quite different."

In its traditional sugar and agriculture business, ABF was transformed last year by its takeover of African sugar giant Illovo. Weston said British Sugar performed better than rival Tate & Lyle, which has recently issued profits warnings, primarily because it refines sugar beet while Tate imports and refines cane.

ABF's Allied Bakeries, which includes the Kingsmill, Burgen and Allinson brands, is looking to push through its second price rise of the autumn. It succeeded in adding about 8p a loaf at the start of September but Weston would not reveal the scale of increase he is planning to pass on to retailers this time to try to catch up with some of the doubling in wheat prices over the past 12 months.

In groceries, a strong performer was Blue Dragon, which is now integrating the recent takeover of Patak's to give a wide range of "world foods". Twinings Tea also did well as Stephen Fry advertised the posh brand. The Everyday tea label also gained share.

ABF's pre-tax profits rose 10% to £613 million on sales up 13% at £6.8 billion. The dividend goes up 4% to 19.5p.

www.abf.co.uk

www.primark.co.uk