• H1 adjusted operating profit 951 mln stg, up 39%
• Expects "significant growth" in full year profit
• Primark to roll out Click & Collect service in UK
• Shares up 7%

LONDON, April 23 (Reuters) - Associated British Foods (ABF.L) New Tab, opens new tab forecast "significant growth" in full-year profit after reporting a 39% jump in the first half that was driven by an improved performance at its Primark fashion retail stores.

The company, whose shares were up 7% in early trading, had previously forecast "meaningful progress" in full-year profit.

AB Foods, which also owns major sugar, grocery, agriculture and ingredients businesses, said adjusted operating profit, its key profit measure, was 951 million pounds ($1.17 billion) in the six months to March 2, on a 2% climb in revenue to 9.73 billion pounds.

"The group has delivered a strong first half performance and is on track to deliver significant growth in both profitability and cash generation ahead of expectations at the start of this financial year," it said.

Primark's first half revenue rose 7.5% to 4.5 billion pounds, with like-for-like sales up 2.1%. It logged an operating profit margin of 11.3%, up from 8.3%, partly driven by improvements in the costs of the products it buys.

The group said Primark would roll out its click & collect service more broadly in the UK after a successful trial.

Unlike most of its rivals, Primark does not offer home delivery.

"We expect Primark to continue to perform well in the second half driven by our store expansion programme and the modest levels of like-for-like growth, as we focus on driving volumes," the group said, cautioning that the consumer environment "remains soft".

It forecast a "moderate improvement" in Primark's operating profit margin in the second half compared to the first.

The group also expects its grocery business, which includes products such as Twinings tea, Jordans cereals, Kingsmill bread and Ovaltine drinks, to continue to perform well in the second half.

It forecast a "substantial improvement" in profitability in its sugar business.

($1 = 0.8107 pounds)

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https://www.reuters.com/business/retail-consumer/primark-owner-ab-foods-expects-significant-growth-full-year-profit-2024-04-23/