AB Foods predicts higher Primark sales
Associated British Foods said second-half earnings will meet its own expectations and repeated its full-year target as sugar sales advanced and growth accelerated at the Primark discount clothing chain.
Adjusted operating profit for the year ending September 15th will be "substantially ahead" of last year, the London-based maker of Twinings tea said in a statement today.
The sugar division's profit will be "considerably higher" than last year, helped by higher prices in Europe, AB Foods said. Sales at Primark stores open at least a year should increase 3 per cent this year, the company said, stronger than the 2 per cent growth reported for the first half.
Sugar is the biggest contributor to AB Foods' profit as increased production and prices in Africa have offset lower prices and "considerably lower" profit in China. Primark's growth has been driven by openings in the UK and Europe, with 19 stores being added this fiscal year and a second outlet on London's Oxford Street due to open on September 20th.
Primark's sales for the year should rise 17 per cent, excluding currency fluctuations, the company said today.
Profit at the grocery division will decline because of restructuring costs at George Weston Foods in Australia and Allied Bakeries in the UK as British consumers continue to rein in household spending.
The company said it would take a £100 million non-cash charge for the impairment of property and equipment at its Australian meat operations, which will lead to "substantially worse" profit this year.