3rd Apr 2020 08:29
(Alliance News) - Associated British Foods PLC on Friday warned that earnings for financial 2020 will now be much lower than envisaged at the start of the financial year due, to the Covid-19 pandemic, and the company continues to take action to cut costs.
Shares in AB Foods were down 2.3% at 1,687.01 pence each in London.
The company, in its results for the year ended September last year and released in November, had guided for progress in adjusted earnings per share for financial 2020. Adjusted earnings per share in financial 2019 were 137.5 pence, up 1% year-on-year.
The FTSE 100-listed company on Friday said its senior managers and directors have also decided to take pay cuts as part of an effort to save cash, and it is taking actions to reduce operating costs of clothing chain unit Primark.
"The board is acutely aware that many Primark employees will see their livelihoods affected by Covid-19. Measures to reduce the operating costs at Primark continue to be developed and implemented," the company said.
The company's other businesses - sugar, grocery, ingredients and agriculture - have not seen any material impact from the virus outbreak, AB Foods said.
Chief Executive George Weston and Finance Director John Bason have decided to temporarily reduce their base by 50%. Paul Marchant, chief executive of Primark, has decided to take a 50% cut to his base salary.
Furthermore, the company has decided against paying bonuses to executive directors. The non-executive directors of the AB Foods board, including Chair Michael McLintock, have decided to temporarily reduce fees by 25%.
AB Foods had around GBP1.7 billion in cash as of Thursday, it said.
By Tapan Panchal; [email protected]
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