Associated British Foods (ABF) raised its full-year profits outlook after a strong fourth quarter at Primark and favourable exchange rates.

The brightest spot is Primark, where sales are expected to be 13% ahead of last year at constant currency. Pound weakness continues to flatter the bottom line: like-for-like sales are up 1% constant currency, or by 20% at actual exchange rate. The brand is doing particularly well in the UK, with sales up 10% and market share rising, consistent with Kantar data showing a steady rise in sales. If consumer spending is slowing, Primark is the sort of brand that benefits. At the same time it continues to build out its presence in the US, but it’s slow progress.

This remains a growing brand. With the addition of 1.5 million sq ft of selling space and 30 new stores in nine countries, ABF now has a total estate of 345 Primark stores with 13.9 million sq ft. Nineteen new stores are planned next year.

Profit margin was down to 10% from 11.7% but this is largely down to exchange rates. A stronger dollar against the pound is hitting margins because it means higher input costs, but a stronger euro has a positive transaction effect from its Eurozone stores.

Swings and roundabouts – the net effect for ABF as a group is an £85m translation benefit as two-thirds of profits come from outside the UK.  Euro strength has also booted British Sugar margins.

With the worst of the pound’s weakening over and the currency now stabilising, no translation benefits are expected next year. Due to the timing of forward contracts and hedges, dollar strength will hit Primark in the first half, with euro strength will offset this in the second half.

Grocery sales are expected to be flat with profits lower. Part of the reason for this seems to be the proliferation and popularisation of supermarket own brand goods. In particular own-label brands are the staple of the likes of Aldi and Lidl which are growing market share in the UK, which appears a net negative for ABF as they prefer to stock their own goods.

Across the rest of the divisions – Sugar, Agriculture and Ingredients – profits are all set to be well ahead of last year.

Cash position looks a lot healthier thanks to the sale of the south China sugar and US herbs & spices businesses, which brought in almost £400m, including debt disposed. Combined with higher earnings the net cash position is expected to be +£650m versus net debt of £315m last year. Shares in ABF  were flat after the news but have risen a third since last November’s full-year results to 3238p.

Meanwhile, the other big headline comes from embattled Carillion. It’s announced a major shakeup of the board as it attempts to turn things around. This does look like a positive move but it may be too little, too late. Keith Cochrane is trying to assert himself and EY is doing the same with its own Lee Watson now Chief Transformation Officer. But a capital raise looks likely and may come when it reports interim results on September 29th. Market cap is about £240m while liabilities are around £1.6bn. Even the award of lucrative HS2 contracts has not helped. Shares fell more than 6% on the open after the announcement to 41p.

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