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Primark-owner AB Foods raises earnings outlook

Reuters - UK Focus

(Adds detail, comments on currency)

LONDON, Sept 12 (Reuters) - Primark-owner Associated British Foods on Monday raised its earnings outlook for the second time in two months, benefiting from better-than-expected second-half trading and favourable currency moves since the Brexit vote.

The firm, which also has major sugar, grocery, agriculture and ingredients businesses, said it now expected earnings per share (EPS) for the 2015-16 year to be marginally ahead of the 102 pence made in 2014-15.

The firm had raised its outlook in July, saying it no longer expected a decline in adjusted EPS.

AB Foods also said operating profit for the group would now be ahead of last year.

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"The underlying operating performance of the group has been ahead of our expectation in the second half and the further weakening of sterling during the period since the EU referendum has resulted in a translation benefit," it said.

The firm said full-year sales at Primark are expected to be 9 percent ahead of last year at constant currency, with sales at stores open over a year down 2 percent, reflecting unseasonable weather patterns.

Underlying revenue and adjusted operating profit for AB Sugar for the full year, at both actual and constant currency, were forecast to be ahead of last year.

The group reiterated that if current sterling exchange rates continue they will have both positive and negative effects on the group's operating profit in its 2016-17 year.

It said there would be an adverse transactional effect on the profit margin on Primark's UK sales, a favourable transactional effect on British Sugar's margins and a translation benefit on group profits earned outside Britain.

Shares (Berlin: DI6.BE - news) in AB Foods, the majority of which are owned by the family of Chief Executive George Weston, have increased 7.4 percent over the last three months.

They closed Friday at 3,156 pence, valuing the business at 25 billion pounds ($33.2 billion).

($1 = 0.7537 pounds) (Reporting by James Davey; editing by Kate Holton)