At the early stages of its new financial year, Associated British Foods (ABF) has reiterated that it is expecting relatively good progress across all its businesses, with it also well prepared for any Brexit-related disruption.
At its AGM today, the group’s Chairman, Michael McLintock, outlined that the AB Sugar unit was set to benefit from the increase seen last year in EU sugar prices and from further cost reductions. He added that the group expected another year of “strong profit and margin growth” in its grocery division, with Twinings Ovaltine in particular benefiting from a more efficient tea supply chain.
Meanwhile, ABF plans to continue expanding its Primark chain, with the most stores being added in France and Spain. Since the year end, it has opened three new stores, bringing the total estate to 376. The group added that it expects Primark’s margin to only see a small reduction, with the effect of a weaker sterling on purchases being largely offset by cost reductions in both goods and overheads.
McLintock concluded his statement by saying: “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.”
ABF has kept its forecast for earnings growth in its 2019-20 year
NAM Implications:
- So, business as usual, despite Brexit and its uncertainties…
- A pointer for others?
