Associated British Foods plc (LON:ABF) chairman, Charles Sinclair, said the group expects an increase in retail profit for the year after opening more Primark stores.
In his annual general meeting statement, Sinclair said Primark's expansion will continue after opening five new stores and relocating two others this fiscal year to bring the total selling space to 14.2 million sq ft.
READ: Primark's US expansion in doubt as Morgan Stanley downgrades AB Foods
“With Primark margins in line with that of our last financial year, we expect an increase in Retail profit,” he said.
The company also expects progress in in Grocery, Agriculture and Ingredients businesses.
Higher volumes and reduced costs in sugar will “only partially” offset the impact of much lower EU prices, Sinclair said.
However, ABF expects no material transactional or translational effect on profit at current exchange rates.
Sinclair repeated the outlook provided at the full year results in November for “progress in adjusted operating profit and adjusted earnings per share” this year.
Adjusted operating profit gained 22% to £1.3bn and revenue increased 15% to £15.4bn in the year to 16 September.
READ: Primark remains growth engine for ABF, says Liberum
But at the time, investors raised concerns over the company’s plans to reduce the size of three of its Primark stores in the US in the coming year.
Deutsche Bank said in a note on Thursday that AB Foods remains its top pick of European non-food retailers.
“We reiterate our Buy ratings on AB Foods, B&M and Boohoo which all play to the theme of superior growth from value and online retailing,” the bank said.