December 6, 2019 / 7:44 AM / 8 months ago

UPDATE 1-AB Foods forecasts earnings growth in 2019-20 year

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LONDON, Dec 6 (Reuters) - Associated British Foods on Friday kept its forecast for earnings growth in its 2019-20 year with anticipated progress in its sugar and grocery businesses supplementing the further expansion of its Primark fashion chain.

For Primark, which generates about half of AB Foods’ revenue and profit, the group forecast a small reduction in full year margin with the effect of weaker sterling on purchases being largely offset by cost reductions in both the cost of goods and overheads.

“We still expect progress, on both a reported and an IFRS 16 adjusted basis, in adjusted earnings per share for the group for this financial year,” Chairman Michael McLintock said in a statement ahead of AB Foods’ annual shareholders’ meeting.

Analysts’ average forecast for 2019-20 EPS is 148 pence, according to Refinitiv data, up from 137.5 pence made in 2018-19.

Shares in AB Foods, the majority of which are owned by the family of CEO George Weston, have increased 22% so far this year. They closed on Thursday at 2,497 pence, valuing the business at 19.7 billion pounds ($25.3 billion). ($1 = 0.7794 pounds) (Reporting by James Davey; editing by Kate Holton and Alistair Smout)

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