Broker snap: AB Foods interims preview

19th Apr 2011 10:34

Credit Suisse reiterates its 'outperform' rating on Associated British Foods (AB Foods) ahead of its interim results due next week, but does highlight its caution in a number of areas.AB Foods - which has operations in the sugar, agriculture, retail, grocery and ingredients markets - confirmed in a trading update last month that the interims will be in 'in line' and operating profit will be ahead in every division except Ingredients.The broker forecasts group earnings (before interest, tax, depreciation and amortisation) of £387m and underlying pre-tax profit of £353m."Inevitably Primark will get most coverage given the pressures on the UK high street...the outlook here will be carefully watched," said analyst Charles Mills.Also, the broker notes that an interesting development is unfolding in Sugar, as problems with the crop will mean that profits in the UK will be off £20m this year. Credit Suisse stays with its target price of 1,060p.---bc