UK: ABF shares fall despite grocery sales jump
Shares in Associated British Foods dipped this morning (10 July) after concern over its discount clothing retail business Primark took the shine off robust figures elsewhere in the business.
ABF, the UK group behind brands including Twinings tea and Ryvita crispbread, said group revenue was up 24% during the three months to 21 June, thanks to sales growth across the business.
Sales at Primark were up 14% but the growth came due to increased selling space and ABF admitted the business, which accounts for a third of its profits, was hit by weak trading in April.
Despite a 30% jump in revenue from its grocery business and a 21% rise in turnover from its sugar unit, shares in ABF had fallen 3.65% on the news to 740p at 10:19 BST.
Looking at grocery, ABF said the success in winning price increases had boosted revenue and recovered rising raw material costs.
The company said its World Foods business, including Patak's, had "performed strongly", while Allied Bakeries had seen volumes rise.
ABF's sugar business was helped by a new business in north-east China, the company said. ABF, however, reiterated that reform of the EU sugar sector would weigh on earnings this year.
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