AB Foods Earnings Fall 40% On Primark's COVID-19 Hit
Associated British Foods has reported a 40% fall in full-year earnings, with a COVID-19 related hit to profit at its Primark clothing business outweighing increases at its sugar, grocery, agriculture and ingredients divisions.
The group said it made adjusted earnings per share of 81.1 pence in the year to 12 September, down from 137.5 pence reported for the 2018-19 year.
Primark's profit plunged to £362 million (€401.5 million) from £969 million (€1.07 billion), reflecting the closure of its stores across Europe during a first wave of coronavirus lockdowns and the impact of the virus on customer demand.
Trading was strong after the stores reopened. However, the group warned on Monday a current second wave of lockdowns would dent sales by £375 million. Primark does not have an online offer.
Notwithstanding the currently announced periods of COVID-19 restrictions, the group expects Primark full year 2020-21 sales and profit to be higher than 2019-2020. It forecast a sales decline in the first half but higher sales in the second half.
The group said it will continue to expand retail selling space.
It said sugar was expected to deliver a higher profit in 2020-21 with improvements in Europe and in the performance of Illovo.
“I am proud of how our people have responded to the many challenges presented by COVID-19," commented George Weston, chief executive. "Throughout, we have provided safe, nutritious food under the most extraordinary conditions, proving the value and resilience of our supply chains.
"Our food businesses delivered an adjusted operating profit increase of 26%, driven by high demand and improved productivity."