Primark owner AB Foods reiterates guidance after in-line first half

23rd Feb 2015 07:02

Primark owner and food ingredients group Associated British Foods (ABF) reiterated its guidance for a small fall in full-year profits this year, saying that underlying trading in the first half has been in line with expectations.Lower sugar prices mean that profits at AB Sugar have been "substantially lower" this year while the strength in sterling against most of ABF's major trading currencies will also have a negative impact on the bottom line.As noted in the previous trading statement last month, adjusted earnings per share (EPS) for the financial year ending September 2015 are expected to see a "marginal decline" from the 98.9p earned last year.However for the first half ending 28 February 2014, adjusted EPS should be in line with the 45.8p earned the prior year on the back of a lower tax rate.Nevertheless, adjusted operating profit is expected to be lower than the £497m earned in the first half of the previous year.Primark remains the key growth driver for ABF with sales up 16% at constant currencies in the first half, helped by an 11% increase in retail selling space.However, like-for-like growth was held back by unseasonably warm weather in the autumn across Europe."Primark has performed well and its expansion is continuing, grocery is expected to deliver a first half operating profit in line with last year, and ingredients and agriculture have made excellent progress in operating profit building on their very positive performances last year," the company said."As previously indicated, profitability at AB Sugar will be substantially lower."