AB Foods raises full-year outlook on strong Penneys
Associated British Foods raised its outlook for full year results on Monday, driven by a strong sales and margin performance from its Penneys fashion business.
The group, which also has major sugar, grocery, agriculture and ingredients businesses, said it expected to report good growth in adjusted operating profit and adjusted earnings per share (EPS) in its year to September 16.
The group made EPS of 106.2 pence in 2015-16.
AB Foods said Primark’s (Penneys in Ireland) 2016-17 sales were expected to be 13pc ahead of last year at constant currency, with like-for-like sales up 1pc.
At actual exchange rates, sales were expected to be 20pc ahead.
Primark, which accounts for over half of AB Foods’ profit, performed particularly well in the UK where full-year sales were expected to be 10pc ahead of last year and market share gains were achieved.
Primark’s full-year operating profit margin was forecast to be better than the first half’s 10pc, ahead of previous guidance.
The group said it expected to end the year with net cash of £650m (€714m) compared with net debt of £315m (€346m) in the previous year.
The fashion retailer added 1.5 million square feet of selling space in 2016-17 and plans 1.2 million in 2017-18.
Shares in the group, majority owned by the family of Chief Executive George Weston, have increased 19pc percent so far this year.
They closed Friday at 3,265 pence, valuing the business at £25.9bn.