Shares in Associated British Foods (LON:ABF) have fallen deep into the red in today’s session as the company reported that it now expected lower sales and profits from its Sugar business. The blue-chip group, which also owns fashion chain Primark, however, reported a rise in its third-quarter revenue.
As of 08:21 BST, AB Foods’ share price had given up 3.42 percent to 2,624.00p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally into positive territory and currently standing 0.34 percent higher at 7,598.92 points. The group’s shares have lost more than 10 percent of their value over the past year, as compared with about a three-percent rise in the Footsie.
AB Foods posts results
AB Foods said in a statement this morning that its revenue momentum from the first half of its financial year had continued in the third quarter, with the group’s revenue from continuing operations coming in three percent ahead of the prior-year period. The company, however, cautioned that with EU sugar prices continuing to decline, it now expected sales and profit at its AB Sugar business to come in lower than previously forecast for both for this financial year and next.
AB Foods nevertheless reassured investors that its group outlook for the full year remained unchanged, with an increased profit from Primark driven by higher margins, set to help offset the downbeat performance at the group’s Sugar business.
Analysts on Primark owner
The 16 analysts offering 12-month price targets for AB Foods for the Financial Times have a median target of 3,175.00p on the shares, with a high estimate of 3,600.00p and a low estimate of 2,600.00p. As of June 29, the consensus forecast amongst 21 polled investment analysts covering the blue-chip group has it that the company will outperform the market.