Primark powers Associated British Foods

Low-price retailer Primark has once again demonstrated its usefulness for Associated British Foods, as the parent company said that performance would be ahead of forecasts thanks to strong sales at the clothing chain.

Overall, it has been a good half year for the firm, with Primark and the other parts of the business putting in a good performance. Overall the UK consumer outlook is more positive than it has been for some time, which suggests that Associated British Foods will see further improvement in the months to come.

Overall, full-year sales at Primark are expected to be up 22% over the previous year, while profit margins will hold up in the second half, having been expected to drop back slightly.

The grocery division and agriculture business will both see better trading in the second half, leading to a general improvement in profits for those areas.

ABF shares are up almost 40% this year. Although they have failed to break decisively above £20 so far, it seems that the solid trading conditions will underpin confidence in the business, with further good news still to come.

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