Associated British Foods (LSE:ABF) said group adjusted operating profit for the full year is expected to be broadly in line with its previous expectations, while adjusted earnings per share is forecast to be ahead.
The company is continuing preparations for the planned separation of its Primark retail business from its food operations. ABF is targeting completion of the demerger in December 2027.
Primark sales are expected to increase by approximately 2% in both the fourth quarter and the full year, supported by new store openings and franchise expansion. Like-for-like sales are expected to decline, while ABF reported challenging trading conditions in continental Europe.
The retailer has continued its ‘Iconic Value’ pricing campaign, expanded its womenswear ranges and increased marketing activity.
Primark Prepares for Great Britain Home Delivery
Primark has acquired a highly automated fulfilment centre in Sheffield as part of preparations to introduce home delivery in Great Britain.
The retailer is also continuing to expand its Click & Collect service as it develops its digital sales operations alongside its store network.
Grocery Profit Expected Below Previous Forecast
ABF reported sales growth across its grocery and ingredients divisions during the fourth quarter.
Within grocery, hot weather affected Twinings tea volumes in the UK and continental Europe, while changes to distribution affected Ovaltine sales. As a result, full-year grocery profit is now expected to be slightly below the company’s previous forecast.
ABF is also integrating Hovis following its acquisition. The company expects cost synergies from the integration to support investment in product development and its bakery operations.
ABF to End Beet Processing at Cantley
The sugar division reported lower sales and profitability in the UK and Spain, reflecting lower European sugar prices, higher gas costs and reduced sugar beet crop yields.
ABF has recognised onerous contract provisions associated with conditions in the sugar business.
The company plans to reduce its UK sugar processing footprint from four sites to three, with beet processing at Cantley scheduled to cease in 2027.
ABF said the restructuring is intended to allow its remaining facilities to serve existing customers more efficiently.
The group continues to invest across its retail, food and ingredients businesses while progressing preparations for the planned separation of Primark and its food operations.
More about Associated British Foods
Associated British Foods is an international food, ingredients and retail group.
Its retail operations are centred on Primark, while its food businesses include brands such as Twinings, Ovaltine and Hovis alongside ingredients and sugar operations.
Primark operates primarily through physical stores and is expanding digital services including Click & Collect and planned home delivery in Great Britain.
ABF is also integrating Hovis into its bakery operations and restructuring its UK sugar processing network as it prepares for the planned demerger of its retail and food businesses.
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