LONDON (Reuters) - Associated British Foods (L:ABF) raised its outlook for full year results on Monday, driven by a strong sales and margin performance from its Primark fashion business.
The group, which also has major sugar, grocery, agriculture and ingredients businesses, said it expected to report good growth in adjusted operating profit and adjusted earnings per share (EPS) in its year to Sept. 16.
The group made EPS of 106.2 pence in 2015-16.
AB Foods said Primark's 2016-17 sales were expected to be 13 percent ahead of last year at constant currency, with like-for-like sales up 1 percent. At actual exchange rates, sales were expected to be 20 percent ahead.
Primark, which accounts for over half of AB Foods' profit, performed particularly well in the UK where full-year sales were expected to be 10 percent ahead of last year and market share gains were achieved.
Primark's full-year operating profit margin was forecast to be better than the first half's 10 percent, ahead of previous guidance.
The group said it expected to end the year with net cash of 650 million pounds ($857 million) compared with net debt of 315 million pounds in the previous year.
The fashion retailer added 1.5 million square feet of selling space in 2016-17 and plans 1.2 million in 2017-18.
Shares in the group, majority owned by the family of Chief Executive George Weston, have increased 19 percent so far this year.
They closed Friday at 3,265 pence, valuing the business at 25.9 billion pounds.