Associated British Foods PLC said on Monday that it expects total sales in its half year to be strongly ahead of last year and also ahead of pre-pandemic levels.

The London-based food and retail company owns fast fashion brand Primark and grocery product brands such as Twinings, Ryvita and Patak’s.

For the six months to March 5, the company’s first half, Associated British Foods said it expects Primark sales to be over 60% ahead of last year at constant currency with an operating profit margin of 11%.

It said this sales increases reflects the fact that all its Primark stores remained open and trading throughout the period except for short periods in Austria and the Netherlands.

Total sales for Primark are expected to be 4% lower than pre-Covid levels in the same period two years ago, however. It added that the effect of inflation on raw materials and the supply chain in Primark has been broadly mitigated by a reduction in store operating costs and overheads and a favourable US dollar exchange rate.

However, the company said that inflationary pressure had resulted in some margin reduction in its in Grocery, Ingredients and Agriculture businesses.

In Grocery, revenue in the first half is expected to be 2% ahead of last year while AB Sugar revenue is expected to be 20% ahead of the previous year, driven by higher sugar and bioethanol prices.

In Agriculture, the company said revenue is expected to be ‘well ahead’ of last year, with higher selling prices reflecting commodity and energy cost increases. Ingredients revenue is expected to be 10% ahead year-on-year as a result of volume recovery.

The company said its full-year expectations remains unchanged, though it added it expects significant progress in annual adjusted operating profit and adjusted earnings per share. The company’s financial year ends September 18.

Associated British Foods intends to announce its half-year results on April 26.

Shares in Associated British Foods were down 3.5% at 1,891.00 pence on Monday morning in London.

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