AB Foods reports flat earnings

Primark-owner Associated British Foods said it is on track to deliver flat annual earnings on Monday with better than expected sugar profits helping to offset lower than forecast margins at its discount fashion chain.

The food and retail group said it expected Primark's annual like-for-like sales to rise three per cent after a similar rise in its first half, but said a higher level of discounting in the UK will see operating margins a little lower than forecast.

The company, which markets Silver Spoon sugar, Mazola vegetable oil, Ovaltine drinks and Twining tea, said its second half operating profits will be in line with its expectations with annual adjusted earnings seen flat.

The group was giving a trading update towards the end of its 52-week financial year to 17 September and will report full year results on 8 November.

"As previously indicated, adjusted earnings for the full year are expected to be similar to last year's very strong results which benefited from 53 weeks trading," the group said in its trading update.