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Associated British Foods

25 February 2009 1,697 views No Comment

Associated British Foods PLC said it expects adjusted operating profit for the first half to be slightly lower than last year as it reported good growth in Sugar and Ingredients with a better than forecast result in Agriculture and that budget chain Primark will again deliver excellent results.

It reiterated its forecast for full-year adjusted earnings to be broadly unchanged.

In a pre-close trading update for the six months to February 28 2009, AB Foods said the Grocery business will show a decline on last year with a substantial margin reduction at ACH and the impact of consumer downtrading on a number of businesses more than offsetting good performances by Twinings Ovaltine and Allied Bakeries.

Net debt for the group is expected to be in line with forecast at the half year.

AB Foods expects to complete a private placement of senior notes to a number of UK and US institutional lenders, raising some US$600 million, which will diversify the company’s sources of funding and lengthen its debt maturity profile.

Trading at Primark has been strong and over Christmas was ahead of company expectations. Sales in the first half were substantially ahead of last year reflecting the increase in retail selling space and a 5 percent increase in like-for-like sales.

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