By James Davey
LONDON (Reuters) – Associated British Foods reported a 10% fall in first-half profit on Tuesday, hurt by a loss in its sugar division, sending its shares down 8% in early trading.
The group however kept its guidance for “low single digit” annual growth at its Primark clothing unit, driven by new stores in continental Europe and the United States, offsetting weaker sales in the UK and Ireland.
Sales at Primark, whose boss Paul Marchant resigned last month over inappropriate behaviour, rose 1% to 4.5 billion pounds.
“While we continue to assume our trading in the UK remains challenging in H2 2025, there have been some early signs of improvement in recent weeks,” the company said.
AB Foods said it expected its sugar business to make a full-year adjusted operating loss of up to 40 million pounds ($54 million), reflecting persistent low European sugar prices, a loss at its UK bioethanol business, Vivergo, and challenges in Tanzania and South Africa.
It said it was close to completing a review of its Spanish sugar business Azucarera, and it was considering mothballing or closing the Vivergo plant unless there were changes to UK bioethanol regulations.
The group maintained guidance for its grocery, ingredients and agriculture businesses.
It said adjusted operating profit, its preferred profit measure, was 835 million pounds in the six months to March 1, on flat revenue of 9.5 billion pounds on a constant currency basis.
Shares in AB Foods fell 8%, wiping out most of the 10% gain recorded so far this year.
($1 = 0.7459 pounds)
(Reporting by James Davey; Editing by Kate Holton, Sarah Young and Paul Sandle)
