STRONG trading at retailer Primark failed to boost its owner Associated British Foods after the Silver Spoon-to-Ovaltine conglomerate warned annual earnings will fall due to the strong pound and weak sugar sales.

The firm, which employs 118,000 people in 47 countries, said the operating profit at discount fashion retailer Primark, which has a Bradford store, jumped eight per cent to £322 million in the 24 weeks to February 28, driven by an 11 per cent increase in retail space.

But overall Associated British Foods said its adjusted operating profit fell four per cent to £450 million due to the strong pound and weak European Union sugar prices causing a loss at its sugar unit.

It added that the strength of the pound, particularly against the euro, and its weak sugar business would lead to “a modest decline” in annual earnings per share at the group.

At Primark, the group said its like-for-like sales were held back by unseasonably warm weather in the autumn across northern Europe.

AB Foods also runs operations in agriculture, grocery and ingredients. Its brands include Ryvita, Ovaltine, Silver Spoon, Kingsmill and Patak’s.

EU sugar prices have fallen by around 40 per cent per tonne over the last two years, which led the sugar unit to swing to a £3 million operating loss, compared to a £64 million operating profit in the same period a year ago.