Associated British Foods has reported a better than expected 10% jump in quarterly turnover despite flat grocery sales.

Primark was the main driver of the growth. A series of store openings in the UK and mainland Europe bolstered Primark sales 25% in first quarter to 5 January.

Sugar sales were also up strongly, growing 12% on last year. However, ABF warned that due to poor growing conditions in 2012, profits in 2013 were likely to be lower.

In grocery, the company said UK sales were in line with last year. It said Twinings tea enjoyed good growth and Allied Bakeries, which makes Kingsmill bread, recovered higher wheat costs through bread price increases.

A lack of restructuring costs at Allied Bakeries and George Weston Foods in Australia would boost grocery profitability in 2013, it added.

“Overall, we consider this to be a fairly strong Q1 update from ABF, as top-line growth came in better than expected,” said Bernstein analyst Eric Scher.  “However, we expect some of the enthusiasm about the Q1 over-delivery to be tempered by management’s cautious tone on margins and earnings for the year.”

The company said it expected “further progress in adjusted operating profit for the full year”. It added that the improvement would be “heavily weighted”  towards the first half.