AB Foods Earnings Grow 2% Because of Primark

AAATrade
AAATrade
Nov 6 · 2 min read

On Tuesday, Associated British Foods showed a 2% increase in annual earnings because of Primark’s growth. Also, the company had a growth in grocery and sugar.

AB Food’s stock rose by 5% while the annual profit increased by 16%. The group beat the predictions of analysts at Shore Capital for a 2% annual growth in earnings and a 3% rise in its dividend.

Sugar may be the main reason for this significant increase. “We had forecast the sugar decline, it’s now behind us, and the group still made progress despite it,” Chief Executive George Weston told Reuters.

“Prices in Europe are significantly ahead of where they were a year ago,” he added.

The company estimates a strong profit for this year in grocery. Primark though is responsible for about the half revenue and profit of the group. Next year the group will open another 19 shops mainly in Europe and the US. Primark has already 360 stores worldwide which 189 are in the UK.

In the UK there are 189 stores and Weston characterized the performance of UK Primark as “solid” in a tough market.

“We’re not completely immune from it, but we think we are winning,” he said, adding: “We’re well set up for Christmas,” Weston said.

AB Foods reported that earnings per share were 137.5 pence in the year to September 14. Also, the revenue increased by 2% to 15.8 billion pounds. Finally, the adjusted pretax profit rose by 2% to 1.41 billion pounds.

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Last updated: 06 November 2019.

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