Associated British Foods, the owner of the Primark value fashion chain, has admitted it expects first-half operating margin to be down after absorbing higher cotton prices over the period. 

However, the company said it recorded particularly strong sales over Christmas and has seen good trading since the New Year. 

The retailer today (27 February) forecast a 15% rise in first-half sales, with like-for-like sales set to rise 2%. And with cotton prices falling from their high point last year, it expects to see the benefit of lower input costs in the second half.

Over the period, the company opened two outlets in Spain, three in Germany, one in each of Portugal and the Netherlands and two in the UK. It expects to open "a number" of stores over the second half, with the largest of these in Spain.