AB Foods' Fashion Arm Primark Lifts Underlying Growth
September 11 2017 - 3:01AM
Dow Jones News
By Razak Musah Baba
LONDON--Associated British Foods PLC (ABF.LN) expects good
underlying growth in fiscal 2017 as a result of a stronger profit
performance from its fast-fashion chain Primark, with an added
currency boost from the Brexit-weakened pound.
The food, ingredients and retail company said Monday that since
the third quarter of the fiscal 2017 trading period, it has
experienced an even lower level of markdown which has further
improved its full year outlook.
As a result, AB Foods expects results for the 52 weeks to Sept.
16, to show an adjusted operating profit for the group well ahead
of last year. The company also expects to report good growth in
group's adjusted earnings per share.
Sales at Primark for the full year are expected to be 13% ahead
of last year at constant currency and on a comparable week basis,
driven by increased retail selling space and 1% growth in
like-for-like sales, it said. On the same comparable basis but at
actual exchange rates, sales are expected to be 20% ahead.
Favorable weather in the fourth quarter and the strength of the
company's consumer offering resulted in markdowns at lower levels
than normal, it said, adding that early trading of the new
autumn-winter range has been encouraging.
Also, AB Foods said it has benefited from the pound's weakness
against major currencies as the U.K. prepares to exit the European
Union.
"With some two thirds of the group's operating profit earned
outside the U.K., this devaluation will result in a translation
benefit of some 85 million pounds ($109.7 million) this financial
year, most of which arose in the first three quarters.
"Next year we would expect no material translation benefit at
current exchange rates," AB Foods said.
-Write to Razak Musah Baba at razak.baba@wsj.com; Twitter:
@Raztweet
(END) Dow Jones Newswires
September 11, 2017 02:46 ET (06:46 GMT)
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