Associated British Foods raised its annual earnings guidance after a strong third-quarter performance from its Primark discount fashion chain more than offset continued weakness in its sugar operations. 

The firm said today it now expected adjusted earnings per share for the 2013-14 year to be ahead of the 98.9 pence made in 2012-13. Previously it had forecast a similar outcome.

AB Foods said the raised guidance reflected better profit progress at Primark as well as at its grocery and ingredients businesses.

This outweighed the adverse effects of lower sugar prices and the strengthening of sterling. 

Primark trades as Penneys here. 

The company said that group revenue from continuing operations for the 40 weeks to June 21 was 2% below the same period last year but 2% ahead at constant currency. 

Primark's sales increased 22% at a constant currency basis in the 16 weeks to June 21, its fiscal third quarter, helped by warm weather and new store openings. 

On the same basis, ingredients sales were up 9% and grocery sales down 5%. 

But sugar sales were down 20%, driven by substantially lower sugar prices, weaker EU sales volumes and lower sugar production in north China. 

AB Foods has previously guided that lower sugar prices, as the market adjusts ahead of EU regime reform in 2017, will mean a substantial reduction in profit from sugar in its 2013-14 fiscal year.

Shares in AB Foods, 55% owned by the Weston family,have soared 61% over the last year, mainly on the back of Primark's success.