Primark owner confident despite weaker trade in Germany
Primark owner Associated British Foods (ABF) has reiterated profit expectations for the full year, despite an anticipated dip in sugar revenue.
The group expects growth across all its businesses except sugar during the first half of the year.
Sales at Primark are projected to be 4% higher in the first half, but are likely to be down 2% on a like-for-like basis.
This reflects a 3% dip in like-for-like sales in the Eurozone, in part due to difficult trading in Germany where the chain plans to reduce selling space at some stores.
Meanwhile, the UK has shown improved trading since low footfall weighed on performance in November. Like-for-like sales are now expected to be flat on the previous year.
The retailer expects to add several new sites this year, including a new 160,000 square foot space in Birmingham which will be its largest store.
International openings include its first stores in both Slovenia and the Czech Republic.
Lower EU prices will continue to weigh on the group’s sugar division, which is expected to report a marginal loss for the year.
In its grocery arm, ABF expects its portfolio of household brands to post higher revenue and profit in the first half.
This excludes a £12 million one-off cost incurred from the move of Twinings Ovaltine production from China to Poland. Including this cost, profits will be flat.
Sales of Ryvita Thins grew in the UK, but profit declined due to the higher cost of raw materials.