Primark parent Associated British Foods says half year figures will be better than expected as currency headaches lift

Catherine Neilan
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Retail Results Demonstrate The Changes On The High Street
Primark's growth isn't enough to offset declines in other parts of the business (Source: Getty)

Primark parent company Associated British Foods has said its half year results should come in slightly better than expected, as currency woes have partially lifted.

The group said it expected "some progress" in adjusted operating profit for the six months to 27 February, but said adjusted earnings per share would come in slightly lower - a marginal improvement on previous guidance.

However the trading outlook for the full year is unchanged.

"The weakening of sterling in recent weeks, particularly against the euro, will ease the effect of currency translation on this year's results assuming current rates prevail, reducing our previous estimate of £25m to £10m," ABF said.

"We now expect only a marginal decline in adjusted earnings per share for the group for the full year."

Primark continues to be the strongest part of the business, with sales expected to be 7.5 per cent ahead of last year at a constant currency, or up four per cent on actual exchange rates, despite a weaker run up to Christmas.

ABF's ingredients arm is expected to grow revenues at constant currency rates, although 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 business for some time, is now looking stable having "performed steadily".

Revenue and profit within its grocery arm should be "close" to last year on a constant currency basis, although will be lower on actual exchange rates. However margins will show progress, ABF said.

Agriculture looks likely to be one of the weakest parts of the group, with revenue down on last year, particularly in the UK.

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