Associated British Foods PLC First Half Trading and COVID-19 Update (1892G)
March 16 2020 - 3:00AM
UK Regulatory
TIDMABF
RNS Number : 1892G
Associated British Foods PLC
16 March 2020
16 March 2020
Associated British Foods plc
First Half Trading and COVID-19 Update
Given current market conditions and rapidly changing
developments regarding COVID-19, Associated British Foods plc
issues this update, further to our pre-close trading update of 24
February 2020.
First half trading
For the first half, adjusted operating profit will be ahead of
our previous expectations, mainly due to higher margins for Primark
and Grocery. As a result, adjusted earnings per share for the first
half will now be ahead of last year on both a lease-adjusted and a
reported basis.
COVID-19 update
Our priority continues to be the health and safety of our
colleagues, customers and partners. Each of our businesses are
closely monitoring the current and potential effects of the
outbreak on their operations.
In our February trading statement we described the risk to
supply of goods from our suppliers in China. Since then, the
situation in China has improved, with most factories supplying
Primark having re-opened. As a result, supply shortages from that
country are now expected to be minimal.
However, with developments over the last week in Italy and, more
materially, over the weekend in France, Spain and Austria, stores
accounting for 20 percent of Primark's selling space are now closed
until the respective governments permit them to re-open.
These stores currently generate 30 percent of Primark's sales.
From the date of this announcement, we had expected sales of
GBP190m from these stores over the next four weeks. The remainder
of the estate, including the UK which represents 41 percent of
sales, has seen like-for-like sales declines over the last two
weeks and these have accelerated over the past few days as a result
of reduced footfall. We are managing the business appropriately but
do not expect to significantly mitigate the effect of the
contribution lost from these sales.
Importantly, in aggregate we have not seen a material impact in
our sugar, grocery, ingredients and agriculture businesses.
Given the effect of COVID-19 on Primark's sales, it is too early
to provide earnings guidance for the remainder of the current
financial year.
The group has a strong balance sheet, substantial cash liquidity
with some GBP800m of net cash at the half year and significant
undrawn bank facilities.
The group will provide a further update with our interim results
on 21 April.
For further enquiries please contact:
Associated British Foods
John Bason, Finance Director Tel: 020 7399 6500
Catherine Hicks, Corporate Affairs Director
Citigate Dewe Rogerson
Chris Barrie, Jos Bieneman Tel: 020 7638 9571
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END
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