Charles Sinclair, the chairman of Associated British Foods, has said that he expects the company's Primark business to continue to post a profit increase, however its Sugar operation is likely to find the going a bit tougher.
In a statement at the company's AGM, Sinclair said, "At this early stage in our new financial year, I would reiterate the outlook that we included in my statement in the annual report.
"With Primark margins in line with that of our last financial year, we expect an increase in Retail profit."
Primark has seen a rapid increase in its selling space over the past few years, and the company opened five new stores in addition to two relocations in the most recent financial year, bringing its total selling space to 14.2 million sq ft.
Sinclair noted that "progress is expected" from the company's Grocery division, where it operates the Twinings tea brand, as well as from Agriculture and Ingredients.
In Sugar, however, "higher volumes and lower costs will only partially mitigate the effect of much lower EU prices."
Sinclair noted that at current exchange rates, the company does not expect any material transactional or translational effect on profit.
"Taking all of these factors into account, at this early stage, we expect progress in adjusted operating profit and adjusted earnings per share for the group for this financial year," he said.
ABF posted its full year financial results in early November, at which it said that its profit before tax for saw a rise 51% to £1.58 billion.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.