AB Foods Says Lost Sales at Primark Hurt 1st Half Results, Warns Over Further Hit in 2nd Half -- Update
February 25 2021 - 3:45AM
Dow Jones News
By Matteo Castia
--AB Foods expects its sales, adjusted operating profit and
adjusted earnings per share to fall in the first half of fiscal
2021
--The conglomerate's Primark clothing arm lost out on GBP1.1
billion of sales in the period
--Store closures should lead to a GBP480 million loss of sales
in the second half for Primark
Associated British Foods PLC said Thursday that it expects lower
group sales, lower adjusted operating profit and lower adjusted
earnings per share for the first half of fiscal 2021, and warned
Primark's sales will continue to suffer due to the coronavirus
pandemic.
The U.K. conglomerate said the effect of the pandemic and the
associated restrictions caused a loss of sales of 1.1 billion
pounds ($1.56 billion) at its Primark clothing business during the
24 weeks ending Feb. 27. Store closures will cause a further loss
of sales of GBP480 million in the second half, AB Foods warned.
Despite the lost sales, Primark remained profitable in the first
half, the company said. "We expect the adjusted operating profit
for Primark in the first half to be marginally above breakeven, but
which would compare to an adjusted operating profit of GBP441
million for the same period in the last financial year," AB Foods
said.
Primark's sales in the first half are estimated to fall to
GBP2.2 billion from GBP3.7 billion a year earlier, the FTSE 100
company said.
It said the fall was largely caused by store closures. In the
periods during which shops were open, business was strong, albeit
still down 15% on the year on a like-for-like basis, due to the
unfavorable context of the pandemic.
AB Foods said it expects 83% of its retail stores to reopen by
April 26, and that the period following the reopening is likely to
be highly cash-generative.
Meanwhile, first-half revenue and profits in the grocery, sugar,
agriculture and ingredients businesses are expected to be ahead of
both expectations and the year-earlier period, AB Foods said.
Write to Matteo Castia at matteo.castia@dowjones.com
(END) Dow Jones Newswires
February 25, 2021 03:30 ET (08:30 GMT)
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