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TOP NEWS: AB Foods Retains Annual Views Despite First Half Profit Drop

LONDON (Alliance News) - Primark owner Associated British Foods PLC on Wednesday reported a 30% ...

Alliance News 17 April, 2018 | 9:35AM
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LONDON (Alliance News) - Primark owner Associated British Foods PLC on Wednesday reported a 30% drop in first half pretax profit due to absence of large exceptional gains and reduced earnings from the sugar division.

For the 24 weeks to March 3, AB Foods reported a pretax profit of GBP603.0 million, down from GBP867.0 million for the same period the prior year, on revenue that rose 2.0% to GBP7.42 billion from GBP7.30 billion. In the first half of 2017 financial year, the company recorded a exceptional gain of GBP255.0 million from the sale of its US herbs and spices and south China cane sugar operations.

Group adjusted operating profit for the period fell 1% to GBP648 million from GBP652 million.

First half adjusted operating profit from the company's sugar division fell 27% to GBP90 million due to significantly lower EU prices. Revenue at the division was down 13% at GBP938 million.

The company's fashion clothing chain, Primark, recorded a 6% rise in adjusted operating profit to GBP341 million. Revenue rose 8% to GBP3.48 billion, driven by increased retail selling space.

AB Foods opened seven new Primark stores in the period across eight countries and plans to open further eight planned in the second half.

The UK listed company has declared an interim dividend of 11.70 pence per share, up 3.0% from 11.35p paid in the the prior year period.

"The group made progress in this period. Good sales and profit growth was achieved by all of our businesses at constant currency, other than Sugar, where the reduction was as expected. Our full year outlook for the group is unchanged with progress expected in both adjusted operating profit and adjusted earnings per share," said Chief Executive George Weston.

AB Foods expects to see an acceleration in profit at Primark and for all other non-Sugar businesses in the second half of the year. It has retained its full-year outlook with progress expected in both adjusted operating profit and adjusted earnings per share.

Shares in Associated British Foods were up 2.6% at 2,652.00 pence on Tuesday.

By Dayo Laniyan; dayolaniyan@alliancenews.com

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Associated British Foods PLC 2,599.42 GBX 0.60
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