Associated British Foods 1st Half Profit Fell as Pandemic Weighs on Primark

By Matteo Castia

Associated British Foods PLC on Tuesday reported a fall in pretax profit for the first half of fiscal 2021 as the coronavirus pandemic has continued to weigh on revenue at its clothing arm Primark.

The British conglomerate made a pretax profit of 275 million pounds ($384.6 million) in the 24 weeks ended Feb. 27, compared with GBP298 million in the year-earlier period.

Revenue fell to GBP6.31 billion from GBP7.65 billion, largely due to declining sales at Primark amid store closures owing to the pandemic.

Indeed, sales lost at the fashion retailer amounted to GBP1.10 billion in the first half compared with a year ago, and were still down 15% on the year on a like-for-like basis after reopening due to lower footfall and category spending, the company said.

Associated British Foods warned that it expects a further GBP700 million of lost sales in the second half.

The company had warned on Feb. 25 that Primark would suffer loss of sales of GBP1.10 billion in the first half and further GBP480 million in the second half due to the pandemic.

Primark revenue in the first half was GBP2.23 billion, Associated British Foods said Monday.

The company also said business in its other divisions--grocery, sugar, agriculture, ingredients--was strong during the first half but will be weaker in the second half.

The board declared an interim dividend of 6.2 pence. No dividend was declared at half-year results for fiscal 2020, due to the pandemic.

"The degree of uncertainty is now substantially lower than last year due to a large proportion of the UK adult population having been vaccinated and the successful reopening of Primark's English and Welsh stores," the company said.

Write to Matteo Castia at [e-mail]

(END) Dow Jones Newswires

April 20, 2021 02:45 ET (06:45 GMT)

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