Associated British Foods posted a 2 per cent fall in annual earnings, as growth at its Primark (Penneys) fashion chain, grocery, agriculture and ingredients businesses was more than offset by a slump in its sugar operation and currency moves.

The group also cautioned on Tuesday it expected currency pressures, notably the weakening of the euro and emerging market currencies versus the US. dollar and sterling, to lead to a “modest decline” in adjusted earnings in the 2015-16 year.

AB Foods said adjusted earnings per share were 102 pence in the year to Sept. 12, down from 104.1 pence last year. The firm had said in September its full year earnings would show a “modest decline” on the previous year’s outcome and analysts had on average forecast adjusted EPS of 98.4 pence, according to Reuters data.

Currency movements had a negative effect on the translation of overseas results but also, and increasingly as the year progressed, on transactional exposures. At current rates AB Foods estimates the translation impact in 2015-16 would be similar to 2014-15’s £31 million ($47.8 million), while the transactional impact would be greater. Group revenue fell 1 per cent to £12.8 billion, while adjusted profit before tax fell 6 per cent to £1.034 billion. The dividend was increased 3 per cent to 35 pence. AB Foods said that after three years of large profit declines for AB Sugar, it expected greater stability in 2015-16 profit ahead of EU quota removal in 2017. It said the good underlying trading achieved by its businesses in the 2014-15 year was expected to continue.

Reuters