Business

AB Foods raises full-year outlook on strong Penneys sales

Sales of fashion retailer expected to be 13% ahead of last year

Associated British Foods raised its outlook for full year results on Monday, driven by a strong sales and margin performance from its Primark fashion business. Photograph: Simon Dawson/Bloomberg

Mon Sep 11 2017 - 08:25

Associated British Foods raised its outlook for full-year results on Monday, driven by a strong sales and margin performance from its Primark fashion business.

The group, which also has major sugar, grocery, agriculture and ingredients businesses, said it expected to report good growth in adjusted operating profit and adjusted earnings per share (EPS) in its year to September 16th. The group made EPS of 106.2 pence in 2015-16.

AB Foods said 2016-2017 sales of Primark, known as Penneys in Ireland, were expected to be 13 per cent ahead of last year at constant currency, with like-for-like sales up 1 per cent. At actual exchange rates, sales were expected to be 20 per cent ahead. Primark, which accounts for over half of AB Foods' profit, performed particularly well in the UK where full-year sales were expected to be 10 per cent ahead of last year and market share gains were achieved.

Guidance

Primark’s full-year operating profit margin was forecast to be better than the first half’s 10 per cent, ahead of previous guidance. The group said it expected to end the year with net cash of £650 million compared with net debt of £315 million pounds in the previous year.

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The fashion retailer added 1.5 million square feet of selling space in 2016-17 and plans 1.2 million in 2017-18. Shares in the group, majority owned by the family of chief executive George Weston, have increased 19 per cent so far this year. They closed Friday at 3,265 pence, valuing the business at £25.9 billion.

– (Reuters)

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