Primark owner warns of exchange rate effects

Associated British Foods, the company behind budget retailer Primark, has said a stronger pound and dollar would have a bigger-than-expected hit on full-year earnings and could weigh on profits in its new financial year.

The company, which makes more than half its annual profits from Primark and also has sugar and ingredients businesses, said yesterday exchange rate moves would knock around £30m (€42m) off operating profit for the year ending September 12, up from its previous estimate of £25m.

The impact in its new financial year could be greater, if current rates persist, it added, pointing in particular to the strengthening of the pound and dollar against the euro.