Published : 4 years ago, on 25/02/2021

LONDON (Reuters) – Associated British Foods warned on Thursday it expected to lose sales worth 1.1 billion pounds ($1.6 billion) from the lockdown of its stores at fast-fashion chain Primark in the first half of its financial year.

The group said it expected Primark’s sales in the first half to Feb. 27 to be about 2.2 billion pounds and adjusted operating profit to be marginally above break-even.

Due to the restrictions placed on Primark in the United Kingdom and across Europe it forecast sales, adjusted operating profit and adjusted earnings per share for the group as a whole to be lower than last year.

But the group said it was looking forward to reopening Primark stores and as of Thursday had likely reopening dates for 233 stores in addition to the 77 stores already open. Some 83% of its retail space should be trading by April 26.

“We expect the period after reopening to be highly cash generative,” it said.

AB Foods also has a grocery division, whose brands include Kingsmill bread and Twinings tea, as well as major sugar, agriculture and ingredients businesses.

It forecast revenue and profit in all of these units to be ahead of both expectations and the first half of last year.

Shares in AB Foods closed Wednesday at 2,437 pence, valuing the business at 19.3 billion pounds.

($1 = 0.7064 pounds)

(Reporting by James Davey; Editing by Kate Holton)