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LONDON (Reuters) - Associated British Foods (L:ABF) forecast a marginal decline in full year earnings with growth at its Primark discount fashion chain and progress in its grocery, ingredients and agriculture businesses offset by continued weakness at its sugar operation.
The group had previously guided that it saw limited opportunity to grow adjusted earnings per share in the 2014-15 year. It made adjusted EPS of 104.1 pence in 2013-14.
AB Foods also forecast on Thursday a decline in full year adjusted operating profit but said the impact on earnings would be mitigated by much lower tax and interest charges.
It said sterling's strength against most of its major trading currencies would though have a negative effect, currently estimated at 15 million pounds.
With the fall in EU sugar prices and weakness in the world sugar price, the group expects a further large reduction in profit from AB Sugar, but said this will put much of the effect of the structural changes in EU prices, seen over the last three years, behind it.
The group's total revenue in the 16 weeks to Jan. 3 rose 3 percent at constant exchange rates and 1 percent at actual rates.
Primark's sales were up 15 percent on a constant currency basis, with trading over the last five weeks of the period, including Christmas, described as strong.
Primark's operating profit margin in the period was in line with management expectations, the group said, that is, lower than last year as a result of a higher level of mark-down.
Shares in AB Foods, 55 percent owned by the Weston family, are up 14 percent over the last year.
They closed Wednesday at 3,035 pence, valuing the business at 23.9 billion pounds ($36.4 billion).