Associated British Foods plc (LON: ABF) have seen their shares jump on Friday morning after the firm gave strong expectations in the update.
Associated British Foods plc is a British multinational food processing and retailing company whose headquarters are in London.
Its ingredients division is the world’s second-largest producer of both sugar and baker’s yeast and a major producer of other ingredients including emulsifiers, enzymes and lactose.
The firm has seen a positive few weeks of trading. At the start of November, shares were driven 5.62% by a confident owner outlook.
AB Foods also mentioned the performance of Primark as a main contributor to good results, as overall sales at Primark came in at £7.79 billion – a 4.2% year-on-year uptick at actual exchange rates.
Shares of AB Foods jumped 0.88% to 2,518p. 6/12/19 10:09BST.
Today, the firm updated shareholders by saying that the company will benefit “materially” from the increase in sugar prices and further cost reduction in its current financial year.
Speaking at the company’s annual general meeting, Chair Michael McLintok said the company expects another year of strong profit and margin growth in grocery, with Twinings Ovaltine drink in particular benefiting from a more efficient tea supply chain.
McLintock said fast fashion retailer Primark has a strong pipeline of new sites, with margin to be reduced by “only a small” amount year-on-year, hurt by a weaker pound for purchases being largely offset by lower costs in both the cost of goods and overheads.
“Our businesses have completed all practical preparations for Brexit and contingency plans are in place should our businesses experience some disruption at the time of exit,” McLintock said.
Shareholders will be pleased that the outlook reiterated in the company’s recent annual report has been sustained.
AB Foods will be pleased with the figures that they have generated over the last few weeks, considering the state of the current retail supermarket industry.
Sainsbury’s (LON: SBRY) saw their profits take a bruising at the start of November. said that, for the 28 weeks to 21 September,
The FTSE100 listed firm said underlying profit before tax declined by 15% to £238 million, compared to the £279 million figure recorded for the same period the year prior.
Additionally, rival Marks and Spencer saw their profits plunge last month, as the firm saw a 5.5% decline in clothing sales and the firm announces mass store closures.
AB Foods should remain optimistic, as the insurgence of rival brands such as Aldi and Lidl have put the big 4 up to a stern test.
Shareholders will be confident from the update given today, as spirits remain high entering the busy festive period.
