Associated British Foods Plc (ABF.L,ASBFY.PK) said Monday its first-half earnings per share will be slightly higher than last year. The British food retailer expects results to be in line with its expectations with all segments delivering revenue growth.
The company also expects its adjusted operating profit to be higher than last year with an "exceptionally strong" performance from sugar division.
In the prior year's first half, earnings per share were 30.6 pence and adjusted earnings were 32.9 pence per share.
For the first six-month period of this fiscal, the company expects profit from Sugar to be substantially ahead of last year, helped by a strong increase in the UK, further improvement in Spain and a better performance from Illovo.
The absence of higher processing costs associated with harsh winter is expected to augment UK results along with high sugar content in the beet and higher prices.
Profit from China is expected to be lower than last year, with prices below last year's record highs.
The company stated that each of its agriculture businesses achieved good revenue growth, driven by K W Trident's strong sales of sugar beet feed and an excellent performance from AB Vista, its international micro-ingredients feed business.
In Grocery segment, revenue in the first half is expected to be ahead of last year, but profit will be substantially lower, the company cautioned. The Ingredients business, although grew revenues, suffered the similar impacts experienced last year by the yeast and bakery ingredients business.
The company's discount retailer Primark saw strong trading, particularly in the Christmas period. Revenues for the first half are expected to be 15 percent higher than last year, with like-for-like sales growth of 2 percent, while operating margin is expected to be lower reflecting continued absorption of higher cotton costs.
ABF expects to raise $526 million through private placement of senior notes to a number of UK and US institutional lenders in late March. It intends to utilize the funds to refinance debt maturing next year and to further diversify its sources of funding and lengthen its debt maturity profile.
In addition, the company expects to open a number of stores in the second half, mostly in Spain.
Associated British Foods is scheduled to announce its interim results on April 24.
ABF.L is currently trading at 1,197 pence, down 22 pence or 1.8 percent, on a volume of 248 thousand shares on the LSE.
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by RTT Staff Writer
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