Subscribe Login
A-Brands

Penneys Owner AB Foods First-Half Profits Held Back By Sugar

By Publications Checkout
Penneys Owner AB Foods First-Half Profits Held Back By Sugar

Penneys and Primark owner Associated British Foods reported a 1% fall in first-half profit, with a resilient performance at its Primark fashion business offset by a previously flagged dip in the performance of its sugar business.

In January, AB Foods had warned that revenue and profit from sugar would fall more than previously forecast in 2017-18 because of lower prices across the European Union.

For the six months to March 3 2018 the group, which also owns major grocery, ingredients and agriculture businesses, made adjusted operating profit of £648 million (€750.6 million).

That compares with company guidance of a "flat" outcome and £652 million made in the first half of its 2016-17 year.

Group revenue rose 2% to £7.42 billion.

ADVERTISEMENT

Sugar Reduction

On a constant currency basis sales and profit growth was achieved in all of the divisions, other than sugar, where the reduction was as expected.

The group maintained its full-year outlook, forecasting "progress" in both adjusted operating profit and adjusted earnings per share.

It forecast a second-half acceleration in profit growth at Primark, due to margin improvement, and continued profit growth from the other non-sugar businesses.

"These should more than offset the decline in profit at AB Sugar in the balance of the year," said Chairman Michael McLintock.

Shares in the group, down 23% over the last six months, closed Monday at 2,583 pence, valuing the business at £20.3 billion.

ADVERTISEMENT

The group is majority-owned by the family of Chief Executive George Weston.

News by Reuters, edited by Checkout. Click subscribe to sign up for the Checkout print edition.

Stay Connected With Our Weekly Newsletter

Processing your request...

Thanks! please check your email to confirm your subscription.