AB Foods expects 7% LFL growth at Primark

7th Sep 2009 07:02

Associated British Foods the foods group that also owns clothing store Primark, said it expects some improvement in adjusted earnings over the full year despite a much higher interest charge.Trading in the second half of the year has been strong. Sales and profit at Primark will again top the preceding year’s figures. Like-for-like sales growth of 7% is expected for the full year driven by a very strong performance in the UK. Operating profit margin is expected to contract, due to the increased fixed overhead of the new UK distribution centre as well as the effect of sterling weakness.‘The stores in Continental Europe have performed well although it is early days for Germany and Portugal,’ the company said. Profit in the Sugar & Agriculture division is expected to be substantially ahead of last year driven by growth in the EU and at its 51% owned Illovo subsidiary in South Africa.The Chinese operations have had a difficult time of it, however, with the significant sugar stock overhang from 2007/8 depressing prices during the first half of the year.The Grocery division has achieved good revenue and operating profit growth in the second half of the company’s fiscal year which runs to the end of September.The star performers in this division have been Allied Bakeries, Twinings Ovaltine and the company’s business in Australia. Meanwhile performance at ACH in the US has been on an upward trend in the second half.