Associated British Foods has reiterated its annual earnings expectations, helped by strong demand and increased store space at its Primark discount fashion chain.
ABF said the growth at Primark and progress at its grocery, ingredients and agriculture businesses would help to offset continued weakness in its sugar operation.
The company said today it still expected a marginal decline in adjusted earnings per share (EPS) for its 2014-15 year from the 104.1 pence made the previous year.
Ahead of the publication of its first half results to the end of February on April 21, AB Foods said underlying trading remained in line with expectations.
As previously indicated, it said adjusted operating profit for the first half was expected to be lower than last year's £497m.
It said adjusted first half earnings per share are, however, expected to be in line with last year, largely benefiting from a lower tax rate.
The expected 16% sales growth at Primark on a constant currency basis was driven by an 11% increase in retail selling space and very high sales densities in stores opened during the last year.
It said Primark's cumulative like-for-like sales had improved since its January trading update and were now level with last year, while its operating profit margin in the period was in line with expectations, though lower than last year as a result of a higher level of mark-down.
Primark trades as Penney's in Ireland.
AB Foods forecast its grocery division would deliver a first half operating profit in line with last year, while ingredients and agriculture would both show progress.
However, as previously indicated, profitability at AB Sugar will be substantially lower, hurt by the fall in EU sugar prices and weakness in the world sugar price. AB Foods is 55% owned by the Weston family.
