AB Foods Reaffirms FY16 Underlying Trading Outlook

By Razak Musah Baba

LONDON--Associated British Foods PLC (ABF.LN) on Monday confirmed its fiscal 2016 underlying trading outlook and said it expects adverse currency effects to ease.

Updating prior to entering the close period for its interim results to Feb. 27, AB Foods said the weakening of sterling in recent weeks, particularly against the euro, will ease the effect of currency translation on this year's results, assuming current rates prevail.

The Twinings tea, Ovaltine and Silver Spoon sugar brands owner said the underlying trading outlook for the group for the full year is unchanged. "The weakening of sterling in recent weeks, particularly against the euro, will ease the effect of currency translation on this year's results assuming current rates prevail, reducing our previous estimate of GBP25 million to GBP10 million ($12.9 million to $32.2 million). We now expect only a marginal decline in adjusted earnings per share for the group for the full year," it said.

The company said at the time of its fiscal 2015 earnings in November, and again at the annual shareholders meeting the following month that it expects currency pressures to lead to a "modest" decline in adjusted operating profit and adjusted earnings for the group for the full year. This was reiterated last month.

AB Foods, which also owns the Primark budget clothing chain, said Primark's sales are expected to be 7.5% ahead of last year at constant currency rates, driven by increased retail selling space, and 4% ahead at actual exchange rates.

AB Foods' interim results will be reported on April 19.

Write to Razak Musah Baba at razak.baba@wsj.com; Twitter: @Raztweet

(END) Dow Jones Newswires

February 22, 2016 02:56 ET (07:56 GMT)

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