Sugar fall hits AB Foods

Falling sugar prices are set to hold back earnings growth at Associated British Foods in the next two years, offsetting continued strong performance at the group’s Primark discount fashion chain.

AB Foods maintained its guidance for its financial year to September 13, forecasting adjusted earnings per share ahead of the 98.9 pence made in 2012-13. It said the adverse effect of lower sugar prices and a previously flagged hit of £50m (€62.4m) on the translation of overseas results arising from the strengthening of sterling would be offset by strong operating profit from Primark and its grocery business, as well as an improvement at its ingredients operation.

Shares in AB Foods have soared 59% over the past year.