AB Foods Sees Lower 1st Half Sales, Profits as Pandemic Hurt Primark

By Matteo Castia

Associated British Foods PLC said Thursday that it expects lower group sales, lower adjusted operating profit and lower adjusted earnings per share for the first half of fiscal 2021 after the coronavirus pandemic hit its Primark clothing arm hard.

The U.K. conglomerate said the effect of the pandemic and the associated restrictions caused a loss of sales at Primark of 1.1 billion pounds ($1.56 billion) during the 24 weeks ending Feb. 27. Still, Primark profitability was maintained, it added.

"We expect the adjusted operating profit for Primark in the first half to be marginally above breakeven, but which would compare to an adjusted operating profit of GBP441 million for the same period in the last financial year," AB Foods said.

Primark sales in the first half are estimated to fall to GBP2.2 billion from GBP3.7 billion a year earlier, the FTSE 100 company said.

It said the fall was caused largely by periods of store closures and that in the periods of open shops business was strong, albeit still down 15% on the year on a like-for-like basis due to the unfavorable overall pandemic context.

AB Foods said it expects 83% of its retail stores to reopen by April 26, and that the period following reopening is likely to be highly cash-generative.

Meanwhile, revenue and profits in the grocery, sugar, agriculture and ingredients businesses are expected to be ahead of both expectation and the year-earlier period, AB Foods said.

Write to Matteo Castia at [e-mail]

(END) Dow Jones Newswires

February 25, 2021 02:41 ET (07:41 GMT)

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