Newspaper article The Journal (Newcastle, England)

Companies Today

Newspaper article The Journal (Newcastle, England)

Companies Today

Article excerpt

BREXIT HOPES Primark owner Associated British Foods said it should ultimately benefit from Brexit as it predicted rising profits, despite a squeeze on its budget fashion chain from the plunging pound.

AB Foods saw shares jump 6% higher as it posted a 5% rise in underlying pre-tax profits to PS1.07bn for the year to September 17, and said it expected another hike in earnings for the coming year.

The group confirmed like-for-like sales at its Primark business dropped 2% in a "challenging" year and repeated warnings that the fall in the value of the pound since the Brexit vote would knock margins at the retailer over the coming year.

AB Foods has already pledged not to raise Primark price tags, even though it is in line for a hit from the pound's fall this financial year, as it buys a lot of its clothes from Asia in US dollars.

But chief executive George Weston said the pound's fall brings "benefits and challenges" to the group.

It is hoping for a boost to the value of overseas group earnings, which account for around half of the group's total, while the new financial year results will also be driven higher by a strong performance from its sugar business. …

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