AB Foods Sees Better Fiscal Year Operating Profit After Brexit Vote

By Tapan Panchal

LONDON--Associated British Foods PLC (ABF.LN) Monday said it has benefited from the weakening of the pound after the U.K.'s decision to leave the European Union, and added that fiscal 2016 operating profit is now expected to be ahead of last year.

The food and ingredients supplier, which also operates the fashion chain Primark, said earnings per share for the period will also be marginally ahead of last year. In July, the company said it no longer expects a decline in full-year adjusted earnings per share because of the pound's depreciation after the Brexit vote.

AB Foods also said it expects to report a 200 million pound ($267.69 million) deficit in its U.K. pension scheme, compared with a small surplus last year, due to a marked decline in U.K. long-term bond yields. The company uses bond yields to value its benefit pension obligations for accounting purposes.

Sales at Primark for the full year are forecast to be 9% above the previous year on a constant currency basis. Like-for-like sales at the fashion chain, however, are expected to decline by 2% mainly due to unseasonable weather.

AB Foods supplies food ingredients and owns food brands such as Ryvita crisp bread and Twinings tea. Primark has almost 300 stores in the U.K., Ireland, mainland Europe and the U.S.

The company expects to release its results for the 53 weeks to Sept. 17 on Nov. 8.

Write to Tapan Panchal at tapan.panchal@wsj.com

(END) Dow Jones Newswires

September 12, 2016 03:13 ET (07:13 GMT)

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