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Associated British Foods warns coronavirus could hurt Primark supply chain

By BFN News | 08:24 AM | Monday 24 February, 2020


Apparel retailer and sugar producer Associated British Foods said it expected to post higher first-half adjusted earnings alongside an improvement in sales. The company, however, also flagged disruptions to its sugar business from the impact of the coronavirus in China, and suggested a prolonged outbreak would hurt the performance of its Primark budget clothing chain. 'If delays to factory production are prolonged, the risk of supply shortages on some lines in its Primark business later this financial year would increase,' the company said. Sales at Primark were expected to be 4.2% ahead of last year in the first half at constant currency and 2.5% ahead at actual exchange rates, driven by increased retail selling space and flat like-for-like sales. In Primark's core UK market, sales were expected to rise 3.0%, driven by new selling space partially offset by a 1.3% decline in like-for-like sales. Output in the sugar business in the first half was limited by heavy rains in a number of countries, but for the full year was expected to be broadly in line with last year at some 1.7m tonnes. Grocery revenue in the first half was expected to be in line with last year at constant currency, with higher sales at George Weston Foods in Australia and the first contribution from Anthony's Goods in the US offset by lower sales at Allied Bakeries. At 8:24am: (LON:ABF) Associated British Foods PLC share price was -41p at 2542p Story provided by StockMarketWire.com

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