Associated British Foods is expected to deliver strong top-line growth when it delivers its full-year results tomorrow (3 November), helped by currency exchange and M&A activity.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
In a research note, Bernstein analysts suggested that ABF is expected to generate reported sales growth of 16.4%, which would bring sales to GBP9.58bn. Like-for-like sales are expected to come in around 7% up on last year, the brokerage added.
However, margins are expected to come under continued pressure, with Bernstein analysts predicting only a 3% growth in pre-tax profits, to GBP652m.
“ABF has experienced seven consecutive semesters of operating margin contraction, and we expect this trend to persist in H2 2009, with margins down -21bps,” the analysts said.
Analysts at Jefferies also predicted that lacklustre margins would dampen the company’s results – with a notable drop in profitability at the group’s discount retail chain Primark.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe “weaker sterling will erode gross margins,” Jefferies analysts said in a note. “This will be partially offset by lower freight costs and better prices from distressed suppliers,” the brokerage predicted.
