The discount fashion chain Primark is outperforming its peers but sugar is starting to look a bit sticky, Associated British Foods said yesterday.
Primark had a very strong end to the financial year which ends on Saturday with sales up 22 per cent, and sales by stores open for at least a year up 5 per cent. “We have completely sold our spring and summer stock,” the finance director John Bason, pictured, said. “Once we got past the cold March and April it was as if we went straight into summer. The UK economy and the UK consumer are both picking up and that will make Primark thrive.”
The budget fashion chain will open its first store in France, in Marseille, in December with plans for more stores on the outskirts of Paris during 2014.
On the grocery front ABF’s Kingsmill has now overtaken Hovis as the UK’s second best-selling bread brand behind the privately owned Warburtons. And its Twinings, Ovaltine, Patak’s and Blue Dragon brands all had a good year. But the sugar business, which had a phenomenal 2012, is looking at a tougher 2014. Mr Bason said: “Sugar prices have fallen earlier and by more than we had expected as more supply comes onto the market. Negotiations with our European customers are proving challenging.”
That caution saw the shares drop 33p to 1,818p.
Graham Jones, an analyst at Panmure Gordon, trimmed his 2014 earnings forecast by 3.6 per cent, but said lower EU sugar prices in subsequent years had already been anticipated so the 2014 fall was “a phasing issue”.