Primark owner Associated British Foods posted a 5 percent increase in its annual earnings as customers look to save money with budget clothing.

Adjusted earnings per share increased to 34.3 pence for the 24 week half-year ending 3 March, with adjusted profit before tax increasing 3 percent to £363m. Adjusted operating profit rose 6 percent to £412m.

"The group delivered good growth in revenue and profit. AB Sugar and Primark both performed strongly, demonstrating continuing momentum," said ABF CEO George Weston.

"We expect substantial growth in both adjusted operating profit and adjusted earnings per share for the group for the full year."

The London-based food and retail group appeared to profit from the present atmosphere of austerity, as customers look for savings with tighter budgets, leading to an increase in Primark sales, which account for a third of group earnings.

Sugar trade profited from increased prices in Spain, Africa and the UK. The ABF half year dividend rose 8 percent to 8.5p a year.

Following the group's announcement, shares rose 2.2 percent in early London trading, changing hands at 1,243 pence a share at 8:24 BST.