British Sugar owner ABF on track to hit full-year forecast

However, partially due to a 13% jump in Primark sales, the company said overall full-year profits will be slightly higher than in 2014, in line with expectations.

In its pre-close trading update for the 52 weeks to 12 September, ABF said, while sales volumes at Allied Bakeries have increased over the year, the United Kingdom bread market remains “challenging” and lower bread prices have resulted in a reduction in profitability. AB Foods will report its full-year results on November 3.

Primark, which now operates more than 280 stores across continental Europe, the United Kingdom and Ireland, is still very profitable and delivered £662m in profits for its parent company, Associated British Foods, last year – a doubling of profits over the past three years.

However ABF warned that a stronger pound and USA dollar will have a bigger than expected hit on full-year earnings and could weigh on profits in its new financial year. The Group said the translation impact will be at a similar level to the current year but the transactional impact will be greater. ABF reported that it had expanded selling space by 9% in the financial year so far and it is planning to expand its shop floors by around 1.5 million square feet.

Revenue and adjusted profit for AB Sugar would be “substantially lower” than the previous year driven by the further decline in European sugar prices, ABF said.

The company has significantly reduced its overheads in the division, “however, these could not compensate for the impact of lower prices”.

World sugar prices fell to below 11.0 cents per pound, the lowest in more than six years.

The shares were among the few blue-chips to fall back in early trading, shedding 69p at 3,070p.

Stock market-quoted ABF, which is controlled by the Weston family that also owns Selfridges, Brown Thomas and Fortnum and Mason, also has interests in grocery brands, agriculture and sugar production.

Primark is preparing to open its first United States store in the historic Burnham building in Boston on Thursday and another near Philadelphia before Christmas.