Associated British Foods has maintained its full year guidance, saying strong profit performances from its Primark fashion chain, grocery, agriculture and ingredients businesses would more than offset a weak outcome from its sugar operation.
The firm said on Monday it expected "progress" in adjusted operating profit and adjusted earnings per share (EPS) in the year to Sept. 15.
Analysts are on average forecasting adjusted operating profit of 1.41 billion pounds and adjusted EPS of 133.3 pence for 2017-18, Reuters data show, up from 1.36 billion pounds and 127.1 pence.
AB Foods said sales at Primark are expected to rise 5.5% at constant currency rates as increased selling space offsets a 2% fall in like-for-like sales.
Primark performed particularly well in Britain with like-for-like sales seen up 1.5%.
The group has warned that AB Sugar’s revenue and profit will be well down on last year due primarily to significantly lower EU prices adversely affecting its UK and Spanish businesses.
Looking ahead to the full year, Associated British Foods said, 'Our full year outlook for the group is unchanged with progress expected in adjusted operating profit and adjusted earnings per share.
'Strong profit performances this year from Primark, Grocery, Agriculture and Ingredients are expected to more than offset the adverse effect of lower EU sugar prices.'
The company said that it expects that 'net interest expense will be lower than last year, following favourable interest rate movements affecting non-sterling denominated borrowings in Southern Africa, and the underlying tax rate will benefit from the reduction in the US federal corporate tax rate.'