Associated British Foods PLC (ABF.LN) said Thursday that its revenue rose for the 16-week period to Jan. 6 after a strong performance from budget-clothing retailer Primark countered a fall in revenue from its sugar business.
AB Foods said revenue from its continuing operations for the 16-week period was 3% ahead of the prior year's at actual exchange rates, and 4% ahead in constant currency.
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Sales at Primark were 9% higher on year at actual exchange rates, with U.K. regional sales performing well and record sales recorded in the week before Christmas, said the company. At constant currencies, Primark sales rose 7%.
The retailer's operating margins in the first half of AB Foods' financial 2018 are expected to be close to those reached at the same period last year, with purchasing control offsetting the adverse effect of a weaker pound, said AB Goods.
AB Sugar's revenue fell 13% at actual exchange rates and 12% in constant currency. AB Foods now expects a greater fall in revenue and profit from the unit than previously forecast, primarily due to "significantly lower" European Union sugar prices following the removal of sales quotas and export constraints.
AB Foods said its grocery business sales rose 1% at actual exchange rates while its agriculture revenue rose 12%, but ingredients sales fell 1%.
The company's effective tax rate for financial 2018 is expected to fall by 100 basis points, following the recent U.S. tax reforms. The tax law passed by the U.S. Congress late last year includes a reduction of the corporate-tax rate to 21% from 35% and limits on the deductibility of corporate-interest payments.
AB Foods said its full-year outlook is unchanged and it expects to make progress in both adjusted operating profit and adjusted earnings.
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(END) Dow Jones Newswires
January 18, 2018 02:48 ET (07:48 GMT)