AB Foods share price up as group raises full-year guidance

Shares in Associated British Foods (LON:ABF) have been in demand this morning after the blue-chip company edged up its full-year earnings forecast. The owner of fashion chain Primark said in a pre-close period trading update today that it expected a marginal decline in adjusted earnings per share in its 2015-16 year, having previously forecast a modest fall.

ABF said the underlying trading outlook for the full year remained unchanged, with the weakening of sterling in recent weeks — particularly against the euro — easing the effect of currency translation on the year’s results from £25 million to £10 million. “We now expect only a marginal decline in adjusted earnings per share for the group, for the full year,” the FTSE 100-listed company stated.
Primark continues to be the strongest part of the business, with sales expected to be 7.5 percent ahead of last year at a constant currency, or four percent up on actual exchange rates, despite a weaker run-up to Christmas. AB Foods’ ingredients arm is expected to grow revenues at constant currency rates, although they will be lower on actual currency exchange rates. However operating profit will be “well ahead of last year”.

Sugar, which has been the weakest part of the group in recent months, is now looking stable, having “performed steadily”. Revenue and profit within AB Foods’ grocery arm should be “close” to last year on a constant currency basis, although will be lower on actual exchange rates. However, margins would show progress, the group said. It further revealed that its agriculture division looked likely to be one of the weakest parts of the group, with revenue down on last year, particularly in the UK.
By 10:35 GMT, AB Foods’ share price had gained 1.60 percent to 3,307.20p. The stock was slightly outperforming the FTSE 100 index, which meanwhile stood 1.26 percent up at 6,025.25 points.
As of 10:48 GMT, Monday, 22 February, Associated British Foods plc share price is 3,306.00p.

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