14th Jan 2016 07:32
LONDON (Alliance News) - Associated British Foods PLC on Thursday reported a fall in revenue in the 16 weeks to January 2 as it continued to be hit by unfavourable currency exchange rates, which it said will hit adjusted earnings for the full year.
The FTSE 100-listed group, which owns discount fashion retailer Primark, as well as British Sugar, along with agriculture and consumer goods businesses, said group revenue in the 16-week period fell 2.0% year-on-year, though grew 3.0% in constant currencies.
At Primark, sales rose 3.0%, somewhat hit by a drag from the weak euro. At constant currency, sales would have risen 7% year-on-year.
Meanwhile, AB Sugar continues to make good progress with its 'Performance Improvement Programme' which is expected to yield further significant gains in the coming year, AB Foods said, while revenue in the agriculture business was hit by lower commodity prices and sugar beet feed volumes.
AB Foods added that has sterling has continued to be stronger than last year against most of its major trading currencies, operating profit margin at Primark will be hit by the strong dollar, while profit improvement at British Sugar will be held back by the euro. AB Foods estimates this will hit adjusted operating profit for the full year ending September 12 by GBP25.0 million.
"Investment in expansion opportunities will continue, most notably for Primark, and there is increasing evidence that our expectation of stability in sugar profit ahead of EU quota removal in 2017 will be realised. There is no material change to our view on the likely net impact on the translation of our overseas results and also on the transactional exposures. We therefore continue to expect currency pressures to lead to a modest decline in adjusted operating profit and adjusted earnings for the group for the full year," the company said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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