Primark owner ABF has 'dedicated team' looking at consequences of Brexit

(c) Sky News 2017: <a href="http://news.sky.com/story/primark-owner-abf-has-dedicated-team-looking-at-consequences-of-brexit-10842774">Primark owner ABF has 'dedicated team' looking at consequences of Brexit</a>
 

Primark owner Associated British Foods (LSE: ABF.L - news) says it has had a dedicated team working for months on Brexit as it announced a sales increase despite tough conditions.

The FTSE-100 parent company of Primark said it had been "actively engaging with a number of Government departments" on the "opportunities and risks" presented by the UK's departure from the European Union.

ABF chairman Charles Sinclair said: "The consequences for the group of the decision by the UK to leave the EU should be seen in the context of the diversity of our operations and geographical footprint, combined with a business model that wherever possible aligns food production with the end markets for our products and a discrete UK supply chain for Primark.

"Nevertheless, we have had a dedicated team working for many months to determine the consequences of Brexit for us, and our businesses are now working to seize the opportunities and mitigate any risks.

"We are actively engaging with a number of Government departments to ensure that these opportunities and risks are recognised."

His words came as the company announced UK like-for-like sales for Primark were up by 2% in the 24 weeks to 4 March.

Among the reasons for this was the opening of 16 new stores in eight countries during that time, the company said.

But there were also warnings about the future: profit margins at Primark were squeezed by the strong dollar pushing up costs and this is expected to get worse in the second half.

ABF is an unusual member of the FTSE-100, with most of its shares held by a vehicle owned by the Weston family, and with external investors relentlessly supportive‎ of its mini-conglomerate structure.

As well as Primark and its sugar business, which includes the Silver Spoon brand, ABF owns a wide range of grocery products, such as Patak's, Ryvita, Jordans, Ovaltine and Twinings.

It also has a large ingredients business and a division supplying technology-based products to farmers and food manufacturers.

ABF said adjusted operating profit was up 36% to £652m for the first half of its financial year to 4 March, adding that its outlook for the full year had improved.

Shares (Berlin: DI6.BE - news) rose about 3% initially before erasing some of those gains to close up 1.3%.

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