Associated British Foods (LON:ABF) is holding its Annual General Meeting today. At the meeting the Chairman, Michael McLintock, will say:
“At this early stage in our new financial year, I would reiterate the outlook that we included in my statement in the annual report.
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.
Primark will continue to expand its selling space this year, with the most stores being added in France and Spain. Since the year end we have opened three new stores, bringing our total estate to 376 stores trading from 15.8 million sq ft. Looking further ahead, Primark has a strong pipeline of good quality sites. 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.
Our businesses have completed all practical preparations for Brexit and contingency plans are in place should our businesses experience some disruption at the time of exit.
Taking these factors into account, we still expect progress, on both a reported and an IFRS 16 adjusted basis, in adjusted earnings per share for Associated British Food for this financial year.”