Apr 17, 2018

Primark profits rise but ABF’s sugar unit not so sweet

The news was less sweet in the conglomerate's sugar unit, which reported a 27 per cent drop in operating profits in the 24 weeks to March 3, as it was hit by a fall in world sugar prices. Shares in ABF rose 3 per cent in mid-morning London trading but have lost 25 per cent of their value over the past six months on fears of lower profitability at Primark - the group's main profits motor, accounting for 46 per cent of sales but 57 per cent of operating profits. Alex Smith, analyst at Barclays said the Florida store would be "An opportunity to test an entirely new demographic and retail format - a strong indication in our view of the group's vision to build a scale business in the US". Operating profits at ABF's sugar division were £90m, 27 per cent down on last year's £123m but higher than analysts' expectations. Pre-tax profits in the half-year of £603m were 30 per cent lower than last time when they were flattered by gains on disposals. Adjusted for these gains, pre-tax profits of £628m were 1 per cent higher.

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