AB Foods Sees Higher Fiscal Year 2018 Primark Profit But Lower Sugar Profit

By Maryam Cockar

Associated British Foods PLC (ABF.LN) said Thursday that it expects a reduced profit from its sugar business due to lower EU sugar prices and an increased profit from its Primark retail business driven by higher margins for fiscal 2018.

The company said it expects good profit growth from its grocery, agriculture and ingredients divisions for the full year. AB Foods's full-year outlook is unchanged, with progress expected in adjusted operating profit and adjusted earnings a share.

For the 40 weeks to June 23, AB Foods said group revenue slowed compared with the previous year as it recorded a 3% rise on a constant-currency basis in the period, while group revenue grew 2% at actual rates. This compares with the 10% growth reported last year in the same period at constant currency and 20% growth at actual rates.

Sales for the company's discount fashion business Primark rose 6% on a constant-currency basis and were up 7% at actual rates, which the company said was driven by increased retail selling space. This compares with 13% growth at constant currency the year earlier and 21% growth at actual rates.

AB Foods said Primark's sales growth was also marginally lower than in the first half of fiscal 2018 due to the later phasing of space growth this year. For the first half of the year, Primark sales were up 7% at constant currency and 8% at actual rates.

Sugar revenue was down 17% in the third quarter due to significantly lower EU prices which adversely affected AB Foods's U.K. and Spanish businesses. The company said EU sugar prices are continuing to decline driven by low world sugar prices and excess supply.

Write to Maryam Cockar at [e-mail]

(END) Dow Jones Newswires

July 05, 2018 02:42 ET (06:42 GMT)

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