Associated British Foods has today forecast a marginal decline in full year earnings.

Growth at its Primark discount fashion chain and progress in its grocery, ingredients and agriculture businesses will be offset by continued weakness at its sugar operation. 

The group had previously guided that it saw limited opportunity to grow adjusted earnings per share in the 2014-15 year.

It made adjusted earnings per share of 104.1 pence in 2013-14. 

AB Foods also today forecast a decline in full year adjusted operating profit but said the impact on earnings would be mitigated by much lower tax and interest charges. 

It said sterling's strength against most of its major trading currencies would have a negative effect, currently estimated at £15m. 

With the fall in EU sugar prices and weakness in the world sugar price, the group expects a further large reduction in profit from AB Sugar, but said this will put much of the effect of the structural changes in EU prices, seen over the last three years, behind it. 

The group's total revenue in the 16 weeks to January 3 rose 3% at constant exchange rates and 1% at actual rates. 

Primark's sales were up 15% on a constant currency basis, with trading over the last five weeks of the period, including Christmas, described as strong.

Primark's operating profit margin in the period was in line with management expectations, the group said, that is, lower than last year as a result of a higher level of mark-down.

Shares in AB Foods, 55% owned by the Weston family, are up 14% over the last year.