Associated British Foods showed it was beginning to reap the benefit of its restructuring programme as it posted a healthy increase in interim profits.

The group behind Ryvita and British Sugar, as well as the Primark clothing chain, sold off a number of divisions last year to concentrate on businesses likely to generate long-term growth.

It decided to offload Burtons Biscuits, the home of Wagon Wheels, Rowallan creameries and its pig business.

The group also reorganised its remaining divisions to improve efficiency, as well as cutting costs across its British Sugar and Allied Bakeries businesses.

Chief executive Peter Jackson said the restructuring moves had begun to pay off, with profits for the first half of the year to March 3 up 12 per cent to £191 million before exceptional items. Turnover dipped by just £10 million to £2.1 billion despite the disposals.

Mr Jackson said the cost-cutting programme at Allied Bakeries enabled the division to compete in a bread market where prices came under severe pressure from supermarket price wars. Primark continued to perform well with operating profit across its 100 stores up 15 per cent to £30 million on sales of £239 million, also an increase of 15 per cent.

Ryvita also enjoyed good profits growth while strong sales of green tea and ready-to-drink iced teas helped boost profits at Twinings.

"The benefits of the restructuring across the group and the new organisational groupings in the UK are now being realised," Mr Jackson said. "Our businesses have taken advantage of the synergies created and have driven down costs."

Mr Jackson said the group had so far withstood both the US slowdown and the escalation of the foot and mouth disease.