Sep 13, 2010
AB Foods sees H2 profit rise, Primark growth slows
Sep 13, 2010
LONDON, Sept 13 (Reuters) - Primark owner Associated British Foods (ABF.L) said its second half profits will show a substantial rise resulting in a very strong rise in annual earnings, but it saw a slight slowdown in sales growth at its fashion discount retailer.
Its 204-strong Primark chain showed like-for-like sales growth of 6 percent for its full year to mid-September, compared to 8 percent at the half year stage, and some 7 percent growth estimated by analysts during its third quarter.
"Trading for the group since the half year has been strong resulting in a substantial increase in adjusted operating profit for the second half compared to last year... As previously indicated, earnings for the full year will show very good progress," the group said in a trading statement on Monday.
The company cautioned that high cotton prices and freight costs and the increases in VAT, implemented in Spain in July and planned for the UK in January will put pressure on profit margins next year.
The company, which markets Silver Spoon sugar, Mazola vegetable oil, Ovaltine drinks and Twining teas, showed a continued recovery at its sugar and grocery businesses after heavy investment and a steady pick-up in demand.
The London-based food and retail group, 55 percent owned by the family of Chief Executive George Weston, will report results for its full year to Sept 18 on Nov 9.
AB Foods shares close at 10.88 pounds on Friday making the group worth around 8.6 billion pounds.
(Reporting by David Jones)
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