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Associated British Foods Says HY Adj. Operating Profit Ahead Of Prior View

Associated British Foods plc (ASBFY.PK,ABF.L) said that adjusted operating profit for the first half will be ahead of its previous expectations, mainly due to higher margins for Primark and Grocery. As a result, adjusted earnings per share for the first half will now be ahead of last year on both a lease-adjusted and a reported basis.

The company stated that it is not able to provide earnings guidance for the remainder of the current financial year, citing the effect of COVID-19 on Primark's sales.

The company said the situation in China has improved, with most factories supplying Primark having re-opened. Thus, supply shortages from that country are now expected to be minimal.

However, with developments over the last week in Italy and, more materially, over the weekend in France, Spain and Austria, stores accounting for 20 percent of Primark's selling space are now closed until the respective governments permit them to re-open.

The stores currently generate 30 percent of Primark's sales. From the date of the announcement, the company had expected sales of 190 million pounds from these stores over the next four weeks.

The company noted that it has not seen a material impact in its sugar, grocery, ingredients and agriculture businesses.

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