Broker snap: Second half outlook subdued at AB Foods

27th Apr 2011 12:14

Nomura says that while Associated British Foods' first half results were 'in line', the second half outlook is more subdued suggesting consensus downgrades for the full year.The British Sugar and Primark owner reported first half sales of £5.21bn and earnings before interest and tax of £390m, broadly in line with Nomura's forecasts of £5.16bn and £391m, respectively, as a better-than-expected performance from Grocery, Sugar and Agriculture was offset by a weaker-than-expected performance in Ingredients.However, the company is "guiding to 2011 earnings per share (EPS) to be broadly in line with last year, which would suggest a circa 3% pullback for consensus, with the company steering to lower second half Primark margins than previously planned," the Japanese broker said.Guidance has now pencilled in a 2011 EPS of 72.3p, while consensus is currently at 74.5p. However, the broker's estimates that the figure will be closer to 73.7p, up 2% on last year.Nomura sticks with its 'buy' rating and 1,240p target price. ---bc