AB Foods Reports 3% Rise in Fiscal Year Adjusted Operating Profit

By Tapan Panchal

LONDON--Primark owner Associated British Foods PLC (ABF.LN) Tuesday reported a 3% rise in fiscal 2016 adjusted operating profit, in line with its previous guidance, and said the recent fall in the value of sterling presents both benefits and challenges for the company.

For the 53 weeks to Sept. 17, the company recorded an operating profit, before exceptional items, of 1.12 billion pounds ($1.39 billion), up from a GBP1.08 billion adjusted operating profit in the same period a year ago.

Pretax profit for the year totaled GBP1.04 billion versus GBP707 million a year ago, on a revenue of GBP13.39 billion and GBP12.80 billion, respectively.

AB Foods said the sterling devaluation will benefit overall group earnings, but will adversely impact the U.K. margins of Primark as the fashion chain buys much of its merchandise in dollars and sells them in sterling. The company expects to record progress in adjusted operating profit and adjusted earnings in the new year.

In September, AB Foods said the weaker pound following the U.K.'s June 23 vote to leave the European Union would bolster its results for fiscal 2016. It also warned that the currency move would hurt profit margins in fiscal 2017 because it has many expenses in dollars and earns much of its revenue in pounds and euros.

The London-based company declared a final dividend of 26.45 pence a share, giving a total dividend of 36.75 pence, up 5% on last year.

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

(END) Dow Jones Newswires

November 08, 2016 02:43 ET (07:43 GMT)

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