Shares in Associated British Foods (LON:ABF) have fallen into the red this morning, even as the company posted a rise in full-year earnings. The FTSE 100 group, however, cautioned that it is expecting lower profits from its sugar business next year.
As of 09:22 GMT, AB Foods’ share price had lost 3.50 percent to 3,226.00p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.02 percent lower at 7,561.10 points. The group’s shares have added just under 30 percent to their value over the past year, and are up by some 17 percent in the year-to-date.
Full-year earnings rise
AB Foods announced in a statement this morning that its revenue had climbed 15 percent at actual exchange rates to £15.4 billion for the 52 weeks ended September 16. The group’s adjusted operating profit meanwhile came in 22 percent higher at £1.36 billion, while adjusted earnings per share rose 20 percent to 127.1p. The Primark owner also lifted its payout to shareholders by 12 percent to 41.0p.
“This was a highly successful year for the group. These results reflect our international diversity, and the strong underlying performance of our businesses was driven by management actions throughout the year,” the group’s chief executive George Weston commented in the statement.
Despite the upbeat results, AB Foods cautioned that higher volumes and lower costs in its sugar business will only partially mitigate the effect of much lower EU prices going forward.
“We expect the profits of sugar to come down in the current year,” Weston further told Reuters.
The Primark owner, however, reassured investors that it expects progress in adjusted operating profit and adjusted earnings per share for the group for the coming year.