Primark owner bullish over growth in new year

PRIMARK OWNER Associated British Foods (ABF) has said it is on course to hit expectations, with strong growth expected in its sugar division, although profits will take a slight hit.

At the company’s annual general meeting, chairman Michael McLintock said: “This year, AB Sugar will benefit materially from the increase seen last year in EU sugar prices and from further cost reduction.

“We expect another year of strong profit and margin growth in grocery, with Twinings Ovaltine in particular benefiting from a more efficient tea supply chain.”

He added that Primark has opened three new stores since the end of the financial year, bringing the total to 376 sites across the world. He also said all preparations for Brexit are in place.

His comments come a month after ABF revealed pre-tax profits slipped eight per cent to £1.17bn for the year to September 14 as it was hit by losses caused by the sale or closure of businesses.

Adjusted pre-tax profits for the year, which strip out exceptional items, improved by two per cent to £1.4bn. Revenues were up by two per cent to £15.8bn for the year. Shareholders are expected to be pleased to hear that improvements are coming in the sugar division, which has suffered recently.

Sales last year dropped seven per cent to £1.6bn on the back of low EU sugar prices and a poor crop in China.