PRIMARK'S owner Associated British Foods has hailed an "excellent" year for the budget fashion chain after sales jumped by 16 per cent in 12 months.

The performance, which features a rise of 4.5 per cent when new store space is stripped out, helped the conglomerate offset sharply lower sales in its sugar division and the impact of the pound's recent strength on overseas earnings.

As well as Primark's continued good progress, AB Foods has been cheered by the growth in its grocery division after strong demand from green tea drinkers helped Twinings Ovaltine post double-digit sales growth in the year to September 13.

The division's Allied Bakeries arm also grew revenues and profits after the launch of Kingsmill Great White bread boosted market share. Primark has been the jewel in the crown at AB Foods for a number of years, leading to a Europe-wide estate of 278 stores and 10.2 million square feet of space.

In the last financial year, Primark opened 1.4m sq ft of selling space in 28 new stores, the most recent being in Berlin and Bath.

It said: "We have a very strong pipeline of new stores in Europe extending over a number of years.

"We expect the increase in selling space in the next financial year to be a little less than 1 million sq ft, to be followed in the autumn of 2015 by a strong programme of openings."

AB Foods said early sales of its new autumn/winter range were encouraging.

Investors were rattled by the continued impact of falling prices on the sugar division. Revenues and adjusted operating profit for AB Sugar will be substantially lower than last year, with lower volumes in north China and a £20 million hit from currency exchange to blame. The decline in prices reflects the end of EU sugar quotas in 2017, although the speed of adjustment has been faster than the company expected.

British Sugar produced 1.32 million tonnes of sugar compared with 1.15m tonnes a year earlier.