UK: AB Foods says sugar weighed on its H1 profit
Published: 04/17/2018, 7:44:54 AM
Profits at Primark owner Associated British Foods fell in the first half of its financial year as the cut-price clothes chain's strong performance was offset by declines in its sugar business, according to the UK's Telegraph newspaper.
Sugar sales in the 24 weeks to March 3 plunged 13% to GBP938 million (US$1.35 billion) as the abolition of the European Union's strict sugar quotas boosted production across the continent, sending prices south.
That held back group revenues, which were up a slender 2% to GBP7.4 billion in the period despite solid growth in ABF's other divisions.
Primark bucked the downward trend afflicting Britain's high streets, with 3% growth in UK like-for-like sales boosting the retailer's overall revenues by 8% to GBP3.5 billion.
The fashion chain expects profits to accelerate during the rest of the year as it reaps the benefit of a weaker dollar.
ABF's pre-tax profits dropped 30% to GBP603 million, though this was largely due to GBP255 million of one-off gains in the previous year from the sale of its US herbs and spices business and its cane sugar operations in southern China. Operating profit dipped 3% to GBP618 million.
George Weston, chief executive, said ABF had "made progress" in the period, with "good sales and profit growth... achieved by all of our businesses at constant currency, other than sugar, where the reduction was as expected".