This content is not available in your region

AB Foods says weak sugar market to hold back earnings next year

AB Foods says weak sugar market to hold back earnings next year
FILE PHOTO: Shopping bags from a Primark store are seen in Oxford street, in London, Britain August 14, 2016. REUTERS/Peter Nicholls   -   Copyright  Peter Nicholls(Reuters)
Text size Aa Aa

LONDON (Reuters) – Associated British Foods <ABF.L> said price pressures in the global sugar market would prevent its earnings from growing in the coming 12 months as the drag on the business offsets strong demand for its fashion retailer Primark.

AB Foods, majority owned by the family of Chief Executive George Weston, has been hit in the last year by a global over-supply of sugar and it said on Tuesday that profit from its sugar business would be significantly lower next year.

That may take the shine off stronger full-year results, when it posted adjusted operating profit of 1.4 billion pounds, up 3 percent and ahead of the analysts’ average forecast of 1.38 billion pounds given by Refinitiv data.

It said it would invest next year in its Primark, Twinings Ovaltine and Ingredients business, and expected retail and grocery profit to increase. But it said sugar would continue to struggle, with a further reduction expected on the average prices achieved this year.

“Taking these factors into account, at this early stage, we expect adjusted earnings per share for the group for the coming year to be in line with this year,” it said.

It reported adjusted earnings per share in the year to September 15 of 134.9 pence, up 6 percent.

(Reporting by Kate Holton; editing by Sarah Young)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on for a limited time.