// AB Foods upbeat on being able to hit forecasts, but warns on slight profit hit for its Primark chain
// Chairman Michael McLintock says all preparations for Brexit and contingency plans are in place when the UK leaves the EU
AB Foods has told shareholders it is on course to hit expectations, with strong growth expected in its sugar division, although profits in its Primark chain will take a slight hit.
At the company’s AGM, 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.”
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On Primark, he said three new stores have opened since the end of the financial year, bringing the total to 376 sites across the world – with particular focus on France and Spain.
“We expect margin for the full year to be only a small reduction on that achieved last year, on a lease-adjusted basis, with the effect of a weaker sterling on purchases being largely offset by cost reductions in both the cost of goods and overheads,” McLintock said.
The chairman also said all preparations for Brexit and contingency plans are in place when the UK leaves the EU.
His comments come a month after AB Foods revealed pre-tax profits slipped eight per cent to £1.17 billion for the year to September 14 after being 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 £1.4 billion.
Revenues were up by two per cent to £15.8 billion for the year, largely driven by Primark which continued to shrug off the malaise affecting many of its retail rivals.
with PA Wires