Primark Owner AB Foods Forecasts Flat First-Half Earnings

LONDON, United Kingdom — Associated British Foods said on Monday it would deliver first-half revenue growth in all of its businesses, other than sugar, helping it to deliver earnings per share broadly in line with the previous year.

The group, which owns the Primark clothing chain as well as major grocery, agriculture and ingredients businesses, said it expected a small reduction in adjusted operating profit for the 24 weeks to March 2, offset by lower net financial expenses.

AB Foods made an adjusted operating profit of £648 million ($846.9 million) in the first half of its 2017-18 year, with adjusted EPS of 61.3 pence.

For the full 2018-19 year the group's outlook was unchanged with adjusted operating profit and adjusted EPS expected to be in line with 2017-18's outcome.

The group said Primark's first-half sales were expected to be up 4 percent, with increased selling space partially offset by a 2 percent decline in like-for-like sales.

With a much higher margin, Primark's profit was expected to be "well ahead" of the same period last year.

The group said early trading of Primark's new spring/ summer range had been "encouraging".

AB Foods cautioned last year that profit in its sugar business would be significantly lower this year reflecting lower EU sugar prices for contracts negotiated at the end of the last financial year.

By James Davey; editor: Kate Holton.