Associated British Foods, the foods group which also owns the Primark clothes store, said its interim results will be in line with expectations with all parts of the business delivering revenue growth.
Adjusted operating profit will be ahead of last year's interim outcome, while net debt at the half-year stage is tipped to come in at around £1.65bn after the amount spent on store developments for Primark remained similar to the prior year's level.
Trading at Primark, in recent years the main engine of growth for the company, got off to a slow start to the new financial year as a result of an unusually mild Autumn, but the clothing chain enjoyed a strong Christmas and has traded well in 2012, such that like-for-like sales are expected to be up 2% on the first six months of fiscal 2010/11.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The operating margin will be lower, however, as expected, reflecting the company's policy of not passing on all the increases in cotton prices.
Profit from the Sugar division will be well ahead of the year before, driven by a good performance in the UK, plus further improvement in Spain, and a better performance from its Illovo sugar producing unit.
The Agriculture businesses' revenue advance was spearheaded by K W Trident, which enjoyed strong sales of sugar beet, and by AB Vista, the group's international micro-ingredients feed business.
The Grocery division's revenue will be ahead of the year before but profit will be substantially lower, due to a number of factors; these include restructuring costs, margin declines at Kingsmill bread producer Allied Bakeries and higher than expected costs of operating the Castlemaine meat factory in Australia.
The Ingredients business is still having to cope with raw material cost increases and a highly competitive trading environment in many of its markets.
jh
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
