The discount chain is capturing a growing slice of High Street sales

The group, which also owns the Ovaltine drink, Ryvita crispbread and Silver Spoon sugar brands, saw profits to 18 September rise 15% to �525m ($968m).

Profits at Primark increased by 23% to �108m, on the back of sales of �858m.

The 120-strong chain, which opened a number of new outlets in the past year, has captured 10% of the UK's discount clothing sector, AB Foods said.

Overall sales at AB Foods rose 5% to �5.16bn.

The London-based group said it would continue to seek acquisitions to boost profits.

Sugar strategy

EU reforms are set to hit sugar prices from 2005 and in recent years, AB Foods has been moving into new areas to offset expected lower profits at its sugar business.

The division was responsible for more than 50% of group profits in 1999 but that figure should fall to about 25% by 2005, AB Foods said.

In 2002, the company bought Ovaltine and the leading US corn oil company Mazola.

And over the last year it made its first move into the South American market by purchasing Mexico's Capullo vegetable oil business.