LONDON, Sept 9 Associated British Foods
forecast "good progress" in full year earnings per share after a
strong finish to the year from its Primark discount fashion
The retail and food group also said on Monday that adjusted
operating profit for the second half of its year to Sept. 14
would be ahead of expectations thanks to Primark's performance.
Recent data and surveys have shown a gradually improving
outlook for UK consumer spending, which generates about
two-thirds of gross domestic product.
Primark has been the standout performer in the clothing
sector with its low prices pulling in cost-conscious customers.
AB Foods said full year sales at Primark, which has more
than 250 stores in Britain and Europe and generates about a
third of the group's profit, were expected to be 22 percent
ahead of the prior year at actual exchange rates, driven by new
store openings and sales growth at stores open over a year of
close to 5 percent.
The firm said Primark's second-half operating profit margin
would be in line with the first half, beating internal
Joint house broker Panmure Gordon increased its 2012-13 EPS
forecast by 1.2 percent to 97.2 pence, equating to 11.4 percent
However, it cut its 2013-14 EPS forecast from 104.3 pence to
101 pence on concerns EU sugar prices are looking weaker than
expected next year.
AB Foods said full-year revenue and adjusted operating
profit for its AB Sugar business would be in line with
management expectations, while its agriculture business would
deliver revenue and profit substantially ahead of last year.
For its grocery business, which includes Silver Spoon sugar,
Twinings tea and Ryvita biscuits it forecast a substantial
improvement in full-year adjusted operating profit after second
half revenues improved.
AB Foods added that year end net debt is expected to be
about 0.9 billion pounds ($1.4 billion) compared with 1.1
billion pounds last year.
Shares in the group, which are 55 percent owned by the
family of Chief Executive George Weston, have risen 39 percent
over the last year.
They closed Friday at 1,851 pence, valuing the business at
14.7 billion pounds.