6th Dec 2019 08:36
(Alliance News) - Associated British Foods PLC said Friday the company will benefit "materially" from the increase in sugar prices and further cost reduction in its current financial year.
Speaking at the company's annual general meeting, Chair Michael McLintok said the company expects another year of strong profit and margin growth in grocery, with Twinings Ovaltine drink in particular benefiting from a more efficient tea supply chain.
McLintock said fast fashion retailer Primark has a strong pipeline of new sites, with margin to be reduced by "only a small" amount year-on-year, hurt by a weaker pound for purchases being largely offset by lower costs in both the cost of goods and overheads.
"Our businesses have completed all practical preparations for Brexit and contingency plans are in place should our businesses experience some disruption at the time of exit," McLintock said.
McLintok reiterated the outlook that was included in the company's recent annual report.
In November, AB Foods had said for the financial year that ended September 14, pretax profit fell 8.6% to GBP1.17 billion from GBP1.28 billion the year prior. This was despite revenue rising 1.6% to GBP15.82 billion from GBP15.57 billion the year before.
The company had said for the new financial year, it expected its sugar unit to benefit from stronger prices and for the grocery and Primark divisions to continue to increase profit and revenue.
AB Foods shares were 1.1% up in London at 2,525.00 pence each on Friday.
By Loreta Juodagalvyte; [email protected]
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