AB Foods Beats 1st Half FY2018 Profit Forecast -- Earnings Review
April 17 2018 - 7:22AM
Dow Jones News
By Maryam Cockar
Associated British Foods PLC (ABF.LN) posted earnings for the
fist half of fiscal 2018 on Tuesday. Here's how the results came
in:
ADJUSTED PRETAX PROFIT: FTSE 100-listed AB Foods' adjusted
pretax profit, before amortization and other costs, was 628 million
pounds ($899 million), beating expectations of GBP618 million,
according to FactSet and based on one analyst's estimate. Last
year, the company reported adjusted pretax profit of GBP624
million.
REVENUE: The food, ingredients and retail group missed revenue
expectations. It said revenue for the six months ended March 3 was
GBP7.42 billion, compared to the consensus forecast of GBP7.58
billion, according to four analysts polled by FactSet. The year
earlier, AB Foods generated revenue of GBP7.30 billion.
WHAT WE WATCHED:
PRIMARK: Revenue for the core clothing retail business Primark
rose 7% at a constant currency basis, or 8% at actual rates, to
GBP3.48 billion from GBP3.22 billion. However, like-for-like sales
were hit by the cold weather in Europe and fell 1.5% in the period.
The company said U.K. sales were 8% ahead of last year, driven by a
3% growth in like-for-like sales and an increase in selling
space.
MARGINS: Primark's operating margin in the first half was 9.8%,
compared with 10% in the year earlier, which AB Foods attributed to
an improved strategy of buying products that offset the adverse
effect of the U.S. dollar exchange rate on purchases.
AB Foods said it expects Primark's profit growth to accelerate
in the second half of the year due to a lower margin driven by
better buying and some benefit of the recent weakness of the U.S.
dollar.
SUGAR: Revenue from the sugar unit fell 12% on a constant
currency basis, or 13% at actual rates, to GBP938 million from
GBP1.08 billion. The company said this was expected due to lower EU
prices which adversely affected its U.K. and Spanish
businesses.
Write to Maryam Cockar at maryam.cockar@dowjones.com
(END) Dow Jones Newswires
April 17, 2018 07:07 ET (11:07 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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