AB Foods Says Fiscal Year 2017 Pretax Profit Boosted By Primark Sales

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AB Foods Says Fiscal Year 2017 Pretax Profit Boosted By Primark Sales

Associated British Foods Plc (ASBFY.PK, ABF.L) Tuesday reported that its fiscal 2017 profit before tax climbed 51% to 1.58 billion pounds from 1.04 billion pounds a year ago.

That compared with analysts' average forecast of 125.7 pence, according to Reuters data, and 106.2 pence made in 2015-16.

Its Primark business received a boost from the weak pound and further expansion, with revenues surging by 19% to £7.05bn, while United Kingdom like-for-like sales jumped 10% ahead.

The group's traditional sugar side also recovered strongly in the year to September 16 as European sugar prices rose. Removing the effects of currency changes and an extra week previous year, sales were up by 14 per cent.

Overall group adjusted operating profit jumped by 22 per cent to £1.36bn.

"This was a highly successful year for the group", said George Weston, chief executive.

Shares dropped 1.7 per cent in early trading.

Ingredients revenue edged up 2% at constant currency to £1.4bn as the company bought Speciality Blending in the USA and launched new bakery ingredient products in country to keep up with fierce competition.

He said that capital investment had hit a record during the year, as ABF "continued to pursue the opportunities to grow our businesses into the future". However, the "difficult" United Kingdom bread market led to a decline in revenue at Allied Bakeries, which sustained a loss. "With a more typical level of markdowns and the absorption of some cost increases we expect full year margins to be similar to that achieved this year", the company said. ABF expects "progress" from its grocery, agriculture and ingredients businesses.

As a result of its performance, Associated British Foods' board has proposed a final dividend of 29.65p per share, bringing its total for the year to 41p.

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