Primark owner AB Foods maintains year guidance

LONDON, United Kingdom - Associated British Foods maintained its annual earnings guidance, with a good finish to the year from discount fashion chain Primark offsetting continued weakness in the group's sugar operations.

The firm said on Monday it expected adjusted earnings per share for the 2013-14 year to be ahead of the 98.9 pence made in 2012-13.

AB Foods said strong operating profit performances from Primark and its grocery division, and improvement in its ingredients business would offset the adverse effect of lower sugar prices and the hit of some 50 million pounds ($80.9 million) from the strengthening of sterling.

The 50 million pounds currency impact figure is also unchanged from previous guidance.

The group said the 278-store Primark's full year sales were expected to be 17 percent ahead of the previous year at constant currency and 16 percent ahead at actual exchange rates.

That growth will be driven by a net increase in retail selling space of 1.2 million square feet and an estimated 4.5 percent rise in sales at stores open at least a year.

That will help offset the fall at the sugar business, with full year revenue and adjusted operating profit for AB Sugar forecast to be substantially lower than the previous year, hit by declining European sugar prices, lower volumes in north China and a currency translation impact on operating profit of some 20 million pounds.

The firm said the world sugar price continues to be unsustainably low at an average of 17 cents per pound which is well below the global average cost of production.

Shares in AB Foods, 55 percent owned by the Weston family, have soared 59 percent over the last year, mainly on the back of Primark's success. They closed Friday at 2,909 pence, valuing the business at about 23 billion pounds.