Primark owner AB Foods reports 'marginally improved' outlook

The group said it continued to expect to report good growth in adjusted operating profit and adjusted earnings per share for the 2016-17 financial year

Group revenue from continuing businesses for the 40 weeks to 24 June was 10 per cent ahead of the same period last year at constant currency (Getty)

Associated British Foods’ full-year outlook has marginally improved after a better-than-expected performance from its Primark clothing chain in the latest quarter, the company said.

The group, which also has major sugar, grocery, agriculture and ingredients businesses, said on Thursday that it continued to expect to report good growth in adjusted operating profit and adjusted earnings per share (EPS) for the 2016-17 financial year.

Prior to the update, analysts forecast adjusted EPS for 2016-17 of 123 pence, according to Reuters data, up from 106.2 pence in 2015-16.

AB Foods said group revenue from continuing businesses for the 40 weeks to 24 June was 10 per cent ahead of the same period last year at constant currency and 20 per cent ahead at actual exchange rates.

Third quarter revenue growth was 13 per cent at constant currency and 20 per cent at actual exchange rates.

It said the results to date reflected a material translation benefit from the devaluation of sterling following last year's Brexit vote. But it noted that at current exchange rates, the translation benefit would be significantly less in the fourth quarter.

Primark’s third quarter sales were up 15 per cent at constant currency and 21 per cent at actual exchange rates.

AB Foods said it now expected Primark’s full-year operating profit margin to be in line with the first half’s 10 per cent, having previously forecast a decline.

Shares in the group, majority owned by the family of chief executive George Weston, have increased 12 per cent over the last year. They closed Wednesday at 2,922 pence, valuing the business at £23.1bn.

Reuters