Primark’s owner shoots to the top of the FTSE leaderboard as ten new stores are announced in the UK for next year

PRIMARK’S owner said it is predicting a post-Brexit profits boost despite a squeeze on its budget fashion chain from the plunging pound.

Associated British Foods saw shares jump 6% higher as it posted a 5% rise in underlying pre-tax profits of just over £1billion for the year - and said it expected another hike in earnings for the coming year.

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But the group confirmed like-for-like sales at Primark are down 2% after a "challenging" year and warned the fall in the value of sterling since the EU referendum would hurt their margins.

AB Foods has already pledged not to raise price tags at the massively popular store as it buys a lot of its clothes from Asia in US dollars.

But chief executive George Weston said the pound's fall brings "benefits and challenges" to the group.

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It is hoping for a boost to the value of overseas group earnings, which account for around half of the group's total, and had a strong performance from its sugar business.

AB Foods said that overall it hoped to gain from the Brexit process in spite of uncertainties.

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It said: "Changes in legislation and trade agreements, particularly in the areas of trade tariffs and UK agricultural policy, have the potential to benefit the group, and the current level of sterling offers UK food producers significant opportunities to replace imported food and build export markets."

The firm, which also owns Twinings tea and Kingsmill bread, saw underlying earnings at Primark edge 1% higher with currency movements stripped out to £689million.

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It blamed "unseasonable weather and cautious consumer sentiment" for sales woes in key markets such as the UK and Germany.

But the group saw a turnaround in profits at its sugar business thanks to surging global sugar prices, while it has also been slashing costs in the division.

Analysts at Liberum said AB Foods had delivered "solid results" for Primark despite the pound's weakness.