Clothing retailer Primark's "exceptionally strong" performance has helped owner Associated British Foods to report a big rise in profits.
Pre-tax profits grew 25% in its first half results which were announced today, with the FTSE 100-listed company posting profits of £452 million and group revenues up 10% to £6,333 million.
The retailer was helped by an "ideal combination" of lower cotton prices, better exchange rates and lower markdowns as operating profits surged 55% to £238 million at the 257-store chain. Like-for-like sales - which strip out new store openings - were 7% higher.
In addition to Primark, AB Foods also owns British Sugar, and a number of well-known food brands such as Kingsmill, Ryvita and Ovaltine.
With the UK economy and economies across Europe seeing weak or negative economic growth, Primark's focus on cheap clothing has proved to be popular among cash-strapped consumers.
"The Primark success story continues. The performance from Primark in the first half was exceptionally strong," said AB chairman Charles Sinclair.
"Trading in the period was very strong, the profit margin was much improved, customers in continental Europe have taken enthusiastically to the Primark brand and there is very real momentum in the addition of selling space."
Primark's performance is in sharp contrast with poor clothing sales at retail bellwether Marks & Spencer, where recent cold weather and weak consumer spending drove general merchandise sales down 3.8% in the first three months of the year.
Primark added 700,000 square feet of selling space during the half, and new stores included a second branch on London's Oxford Street, a relocation in Sunderland and six more outlets in Spain.
The retailer's European expansion is set to continue, with plans for its first stores in France in its next financial year.
For more information on the UK retail sector, see the latest research: UK Retail Sector
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