AB Foods profit beats estimates as sugar offsets Primark dip

Bloomberg

Associated British (AB) Foods Plc reported first-half earnings that beat analyst estimates as improved results from its sugar business offset a decline in profit at its Primark discount retail chain.
Adjusted pretax profit rose 4 percent to 466 million pounds ($667 million), the London-based company said in a statement on Tuesday. Analysts were predicting 454 million pounds, according to the median of 10 estimates compiled by Bloomberg. The company reiterated that it expects a marginal decline in adjusted earnings per share for the full year, and said declines in sterling should no longer have a material effect on results.
“These results demonstrate underlying progress for all of our businesses in the period despite currency,” Chief Executive Officer George Weston said in the statement.
The result marks a reversal for the company, as plummeting profit in its sugar-production business has largely offset the growth of Primark in recent years, resulting in stagnant earnings.
Despite falling sugar prices, AB Foods agreed this month to buy the 48.65 percent stake it doesn’t already own in the South African producer Illovo Sugar Ltd. in an attempt to capitalize on rising demand in Africa.
The UK owner of Twinings tea gets more than half its sales from businesses outside the UK Sterling has fallen against the euro and the dollar since the start of the year, weighed down by uncertainty ahead of a vote on the U.K.’s European Union membership.
AB Foods is a British multinational food processing and retailing company whose headquarters are in London, UK.
Its ingredients division is the world’s second-largest producer of both sugar and baker’s yeast and a major producer of other ingredients including emulsifiers, enzymes and lactose. Its grocery division is a major manufacturer of both branded and private label grocery products and includes the brands
Mazola, Ovaltine, Ryvita, Jordans and Twinings.