An "enormously encouraging" improvement at its Allied Bakeries subsidiary capped a strong performance by manufacturing giant Associated British Foods - to offset increased costs at its European sugar business.

ABF said profits were up by more than a quarter (27%) at its grocery division. As well as Allied Bakeries, drinks division Twinings Ovaltine and ethnic foods business Westmill were also cited as strong performers.

Also performing strongly was clothing retail arm Primark, which saw sales climb from £1.6bn to £1.93bn, while profits edged up to £233m.

At its sugar business, however, profits dipped from £199m last year to £153m, with ABF pointing to exceptional costs of £50m for the year due to regulatory changes in the UK and Poland.

Overall, pre-tax profits rose by 4% to £527m, while total sales for the year to 13 September were up by more than a fifth (21%) to £8.2bn.

ABF chief executive George Weston said the results "demonstrated the resilience of the group".

“Consumer spending in many parts of the world has been under pressure for some months [and] despite this, grocery, agriculture and Primark all delivered strong sales and profit growth," said Weston. "While faced with a general economic downturn, we remain committed to the group's expansion and development, most notably in sugar and Primark.”

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