Shares of food and retail conglomerate Associated British Foods rose this week on the back of solid growth in its food and sugar arms, as well as a late Christmas flurry of sales for its key Primark clothing business.

Overall sales in the 16 weeks to 6 January 2024 were up 5.4% at constant currency to £6.89bn, and up 2.8% at actual currencies, it revealed this week. ABF said its grocery business “performed well” – particularly its US-focused brands, which grew by 5.4% at constant currency.

It highlighted Twinings, which it said traded well across its key markets, while Ovaltine had a strong performance in western Europe but was weaker overall as it continued to face challenges in Asia.

Its sugar division continued its recovery: sales were up 13%, and the forecast of UK sugar production will still be significantly above last year despite the recent weather.

Meanwhile, Primark sales grew 7.9% over the period. Despite a slow start, strong Christmas trading saved the day. Like-for-like sales grew by 2.1% driven by higher average selling prices.

In the UK, total Primark sales in the period rose 4.5%, with like-for-like sales up 3.8% thanks to a boost in the run-up to Christmas. In Europe, total sales in the period rose 8.1%, with like-for-like sales up 1.3%, while sales in the US grew by 45% in the period, driven by store openings.

ABF said its whole business continued to trade well and forecast a year of “meaningful progress” in profitability, driven by a recovery in Primark margin and a marked improvement in British Sugar profitability.

Liberum welcomed the “good set of numbers”, highlighting that its confidence in higher margin “should insulate the group against potential additional costs of supply due to the disruption in the Red Sea”. HSBC noted the improving outlook for Primark input costs drove an increased in profit expectations, while “better sales growth from Grocery and Ingredients also drives an improving profit outlook for these divisions”.

ABF shares rose 2.8% over the most recent five days to 2,345.6p and are 27.8% up year on year despite the wider pressure on the clothing retail sector..

Elsewhere, Fever-Tree posted annual growth of 6% despite a stagnation of UK sales as it doubled profits in the second half of 2023.

Announcing a pre-close update for the year to 31 December, Fever-Tree said group revenues were up 6% to £364m.

Growth was driven by the US, where sales were up 24% to £117m at constant currency, as the group’s core UK revenues fell back 1% to £114.8m. However, UK revenue was ahead of guidance, reflecting solid trading in Q4.

The group expects to deliver adjusted EBITDA for the full year of £30m, which is at the lower end of previous guidance – despite group EBITDA doubling in the second half of the year.

Peel Hunt noted: “Whilst we were expecting a weak statement, given the poor industry data, this was worse than we anticipated. The story has been held up by revenue growth – this now looks tenuous.”

Fever-Tree shares were down in early trading, but were up 4.8% to 1,060.6p by early afternoon on hopes for further US growth as it overtook the UK as its largest market.