Associated British Foods says earnings to exceed its expectations

Associated British Foods, the sugar and ingredient company that also owns the Primark retail chain, said second-half earnings will exceed its own expectations on quicker growth at the fast-fashion chain.

The group’s adjusted operating profit for the second half will top forecasts, while adjusted earnings per share for the 12 months through Sep 14 “will show good progress”, the London-based maker of Twinings tea said yesterday.

Associated British Foods shares have gained 18% this year, fuelled by prospects for the European expansion of Primark.

The chain in June began to sell some of its products through Asos Plc, Britain’s largest online-only fashion retailer, and plans to open its first store in France.

Sales at Primark stores open at least a year should increase 5% this year, said Associated British Foods. That compares with the 5.2% median increase based on 11 analyst estimates in a Bloomberg News survey.

— Bloomberg