Associated British Foods forecast another year of falling earnings as the weakness of the euro and emerging-market currencies hurts the owner of Primark budget fashions.
Profit in the year through 2016 will show a “modest decline,” AB Foods said Tuesday as it reported an outcome for the previous 12 months that beat analyst estimates.
AB Foods shares fell as much as 2.9 per cent in London yesterday as investors focused on the pessimistic outlook. The weakness of the euro against sterling will have a “significant impact” on the profitability of the company’s UK sugar business, Chief Executive Officer George Weston said in an interview.
Adjusted earnings per share fell 2 per cent to 102 pence in the 12 months ended 12 September the London-based company said in a statement Tuesday. That compares with the 98.4 pence average estimate of 22 analysts compiled by Bloomberg.
AB Foods has come to rely on Primark for growth as record global sugar supplies have led to a slump in profitability at that business. The retailer’s expansion is continuing with as many as three new stores in Italy, the European Union’s second- biggest clothing market, the first of which will be in Milan in early summer 2016.
