PRIMARK OWNER ABF REPORTS REVENUE GROWTH AHEAD OF SPIN-OFF

Associated British Foods reported that group revenues increased 3% to £5.3 billion for the 16-week period to 20 June, according to the company's quarterly statement. The retail division, predominantly Primark, saw revenues rise 4% year-on-year to £2.92 billion. ABF stated it expects adjusted pre-tax profits to fall below the previous year's level, and warned that elevated gas costs resulting from the Middle East conflict will damage sugar division profitability in the coming year.

Primark's like-for-like sales declined 2.2% in the quarter, though the company opened new stores. Within the UK market, Primark recorded 1% sales growth with flat like-for-like performance. The retailer experienced strong trading in March but saw weaker sales in April and May, which ABF attributed to Middle East conflict impacts on consumer sentiment and unseasonable weather; improved conditions in June supported recovery. ABF's grocery division, which includes Twinings and Ryvita, grew revenues by 1%, whilst the sugar arm experienced a 4% revenue drop linked to lower European selling prices.

Chief executive George Weston stated that gas price increases driven by the Middle East conflict had worsened the European sugar profit outlook for next year. ABF said trading remained "resilient" despite "challenging" retail conditions across most markets. The group is preparing to separate Primark through a spin-off expected to complete by the end of next year. ABF stated its full-year group outlook remains unchanged aside from the sugar division.