Associated British Foods (ABF.L) in its trading update said that the trading in the second half of the year has been strong. The company said it expects some improvement in adjusted earnings over the full year despite a much higher interest charge.
Sales and profit at Primark will again be well ahead of last year. Like-for-like sales growth of 7% is expected for the full year driven by a very strong performance in the UK.
Operating profit margin is expected to contract, due to the increased fixed overhead of the new UK distribution centre and the effect of sterling weakness.
Sugar & Agriculture profit is expected to be substantially ahead of last year driven by growth in the EU and at its 51% owned Illovo subsidiary in South Africa.
The company stated that the businesses in China had a difficult year, with the significant sugar stock overhang from 2007/8 depressing prices during the first half of the year.
The Grocery division has achieved good revenue and operating profit growth in the second half of the company's fiscal year which runs to the end of September.
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