Operating profit at Primark also rose to £154m from £151m a year earlier despite pressure on margins from a spike in cotton prices. George Weston, chief executive of AB Foods, last year pledged not to pass on higher cotton prices to Primark's customers, resulting in the retailer reporting its first drop in annual profits. Mr Weston said the new store openings and solid sales growth during the first half helped overcome cotton pressures. "The sales were so strong that we have managed to absorb that margin hit in the first half and a little bit more," he said. Cotton prices have since fallen, resulting in the company forecasting "strong" profit growth from its discount clothing chain over the next six months. Mr Weston argued sales momentum remained strong, although shoppers had changed their habits to cope with the continued squeeze on their incomes. "People are shopping much more carefully, buying only what they went into the store to buy rather than something that looked nice while they were in it," he said. AB Foods' sugar business was helped by stronger prices and volumes, pushing revenue up 17pc. Profit at its grocery business was hit by restructuring costs in the UK and Australia. The group raised its half-year dividend 8pc to 8.5p.