Shares in Associated British Foods slipped this morning (9 September) as concern over the outlook for its sugar business overshadowed news the company expects to book an expectation-beating second half.
In a pre-close period trading update, the firm said the second-half result was ahead of expectations, boosted by a lower net interest expense, lower tax rate and strong growth at Primark, the discount clothing chain.
The group’s sugar unit performed “in line” with expectations, but ABF warned on pressure on pricing in Europe and China. The company also revealed that pricing negotiations for the coming fiscal were proving “challenging”, particularly in Europe.
Grocery sales continued to improve and the Kingsmill-to-Ryvita manufacturer said it expects a strong lift in profits as it laps last year’s one-time expenses.
Shares in ABF were down 1.94%, dropping to 1,815p at 10:19 BST.