Business

Monday 23 October 2017

Currency swings to hit Primark owner ABF as US debut looms

John Mulligan

John Mulligan

Shares in Primark owner Associated British Foods (ABF) slumped more than 5pc yesterday, after it warned a weak euro would result in a bigger hit than expected to its bottom line.

ABF noted that exchange rates between some of its major trading currencies had "changed markedly" in recent months.

"The impact on adjusted operating profit in the first half from the translation of overseas results into sterling was a loss of £11m (€15.2m) and, if current rates persist, the translation impact on full-year profits when compared with last year would be in the order of £25m (€34.7m)," it predicted.

Group revenue rose 1pc to £6.25bn (€8.7bn), and was 3pc higher on a constant currency basis.

Adjusted operating profit was down 5pc at £474m (€659m), while pre-tax profit was 51pc lower at £213m (€296m).

Primark, which is headquartered in Dublin and trades as Penneys here, again proved to be the star performer for ABF. Primark's revenue in the 24 weeks to February 28 rose 12pc to £2.5bn (€3.5bn), while operating profit at the unit was 8pc higher at £322m (€447.7m).

Penneys outlets in Ireland performed "very strongly", according to ABF.

Irish Independent

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