ABF shares knocked despite Primark's 'record' Christmas week

ABF shares knocked despite Primark's 'record' Christmas week

ABF shares knocked despite Primark's 'record' Christmas week

Sales at Primark were 9% higher on year at actual exchange rates, with United Kingdom regional sales performing well and record sales recorded in the week before Christmas, said the company.

In its statement, ABF said: "A revenue and profit reduction greater than previously forecast is now expected for the full-year, primarily as a result of significantly lower European Union sugar prices, which adversely affected our United Kingdom and Spanish businesses".

Group revenue from continuing operations was boosted by the strengthening of the pound against ABF's major trading currencies, other than the euro, for the 16 weeks ended January 6 2018.

The food, ingredients and retail group said it delivered revenue growth across all businesses apart from sugar, which saw revenue fall 13%.

It also expects sugar production to ramp up during the next fiscal year after the EU's sales quotas and constraints on exports were abolished at the end of 30 September.

AB Foods still left its outlook for the group unchanged with "progress expected" in adjusted operating profit and adjusted earnings for the full year.

This reflected a "strong" like-for-like sales performance in the United Kingdom and continued store expansion.

The company expects its operating margins for the first half of its financial year to be close to those in the same period last year, with better buying offsetting the adverse effect of the weaker sterling / USA dollar exchange rate on purchases. Sales were 9 per cent ahead of past year at actual exchange rates. It expects to open 1.2mln sq ft this financial year.

In the 16-weeks to January 6, AB Sugar's revenue fell 12% on a constant currency basis. This had been bolstered by good sales growth of its Twinings and Ovaltine tea brands.

"The UK continued to perform well with strong like-for-like sales, a consequent strong increase in share of the total market, and trading which reflected the breadth of our consumer offering", the company said in a statement.

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