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Dec. 9 (Bloomberg) -- Associated British Foods Plc, the owner of the Primark discount-clothing chain and the Silver Spoon sugar brand, reiterated its forecast that sales and profit will increase this fiscal year as commodity costs ease.
The anticipated improvement in so-called adjusted operating profit will be weighted toward the second half, Chairman Charles Sinclair said in a statement released at the time of today’s annual general meeting. Business in the first two months of the financial year was “in line with our expectations,” he said.
Sugar production in the northern hemisphere has made a “good start,” the company said. AB Foods makes sugar in countries including China, Spain and the U.K., and expects higher prices to be a benefit in the coming year. The sugar unit represented about 33 percent of operating income last year. Sugar prices have increased 15 percent in the last year.
Food and clothing producers have been hurt by soaring costs of commodities including wheat, oil and cotton. AB Foods said in the statement that it doesn’t expect to see the effects of “subsiding” costs “immediately, and in the case of Primark, not until the beginning of the new calendar year.”
The shares traded down 1 penny at 1,082 pence as of 12 p.m.
AB Foods, which controls Illovo Sugar Ltd., the largest maker of the commodity in Africa, reported adjusted operating profit of 920 million pounds ($1.45 billion) in the year ended Sept. 17.
--Editors: Paul Jarvis, David Risser.
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