(ABF.L) Associated British Foods PLC Buy/Sell

RNS Number : 8397H Associated British Foods PLC 01 March 2010

Associated British Foods plc

Director shareholding

1 March 2010

Associated British Foods plc (the 'Company') was notified on 26 February 2010 that John Bason, Finance Director, had exercised options over the Company's ordinary shares on 25 February 2010, the details of which are as follows:

· Option over 50,000 ordinary shares granted on 17 January 2001 under The Associated British Foods 2000 Executive Share Option Scheme at an exercise price of 484p
· Option over 50,000 ordinary shares granted on 7 December 2001 under The Associated British Foods plc 1994 Share Option Scheme at an exercise price of 497p
· Option over 50,000 ordinary shares granted on 9 December 2002 under The Associated British Foods plc 1994 Share Option Scheme at an exercise price of 564p

Of the 150,000 ordinary shares acquired as a result of the above option exercises, Mr Bason sold 147,500 shares at a price of £9.37 per share, retaining 2,500 of the shares. This transaction took place on the London market on 26 February 2010.

This notification is made in accordance with Disclosure and Transparency Rule 3.1.4.

This information is provided by RNS The company news service from the London Stock Exchange

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RNS Number : 4428H Associated British Foods PLC 22 February 2010

22 February 2010 Associated British Foods plcPre Close Period Trading Update

Associated British Foods plc issues the following update prior to entering the close period for its interim results to 27 February 2010, which are scheduled to be announced on 20 April 2010.

The interim results will show a strong increase in revenue with growth achieved in all segments. Operating profit will be substantially higher than in the corresponding period last year in all segments except Agriculture, where trading last year benefited from unusually high volatility in commodity prices. Adjusted operating profit for the group for the half year will be well ahead of last year with growth forecast to continue in the second half. Net financing costs in the first half will be higher, primarily as a result of the US private placement which was concluded last March and an increase in net financing costs relating to the group's defined benefit pension schemes. Adjusted earnings will show a substantial increase at the half year and we remain confident of very good progress in earnings for the full year.

The income statement will include a profit on disposal and closure of businesses of some £24m which is excluded from adjusted earnings per share, arising principally from the sale of the Polish sugar business.

Cash flow and funding

The first half cash flow is expected to be better than the same period last year with a higher profit before depreciation and a lower working capital outflow more than offsetting the budgeted increase in capital expenditure. Our funding position has benefited from the £115m minority contribution to the Illovo rights issue at the beginning of this financial year. Net debt for the group at the half year is expected to be close to the £1.14bn at the same time last year.

Sugar

Profit from Sugar will be substantially ahead of last year driven by an excellent performance in Europe and a welcome recovery in China.

This year's UK campaign began well with high beet yield per hectare and high sugar content in the beet. The harsh winter has extended the campaign into March but yields and sugar content remain high, and sugar production is estimated to be some 1.3 million tonnes compared with last year's 1.19 million tonnes. Profit will reflect the higher volumes, better factory efficiencies and lower energy costs together with a strengthening of the euro. In Spain, sales volumes were ahead of expectations and the new refinery at Cadiz is operating well.

Illovo's profitability has been reduced by the weakening of the currencies outside South Africa, the impact of the strength of the rand on South African exports and extremely wet weather at the end of the season which reduced sugar production in South Africa and Zambia. Malawi and Mozambique experienced more favourable conditions and achieved good factory performances.

Sugar prices in China have increased substantially and are currently at record levels. Sugar production is expected to be lower than last year following the effect of drought on cane yields in the south and a smaller beet crop in the north. A significant improvement in results is expected year-on-year.

Agriculture

In Agriculture, UK feed revenues will be ahead in all sectors except sugar beet feed which has been affected by lower prices. Growth in speciality feeds and nutrition has exceeded expectations, enzyme sales have been encouraging with further registrations of new products in the period and a new feed mill has been commissioned in China. Adjusted operating profit will be lower than last year's exceptionally high level, largely as a result of reduced volatility in UK grain markets leading to less trading activity by Frontier.

Grocery

Grocery profits in the first half will be well ahead of last year, despite a charge of £19m for the manufacturing reorganisation at Twinings, with a much improved contribution from our US bottled oils operations and good performances from all of our UK grocery businesses particularly reflecting the benefits of restructuring work undertaken last year.

A strong sales performance by Twinings Ovaltine has driven good underlying profit growth. Allied Bakeries continued to trade well with higher branded volumes generating an improvement in profit. Silver Spoon saw an increase in demand for home-baking ingredients and profit also benefited from last year's packaging plant rationalisation. Elsewhere in UK grocery, there are signs that the falling demand seen last year in the ethnic wholesale sector is stabilising and Westmill has seen profit improvement although not yet back to the levels experienced two years ago. Advertising support for Patak's drove good revenue growth which, together with further improvements in operating performance at the sauces factory in Poland, will lift profits year-on-year.

A strong Australian dollar has contributed to an increase in sterling translated profits from our grocery business in Australia. Baking and cereals have achieved underlying profit growth through improved factory performance and an increased focus on cost reduction. In the meat business, falling commodity costs led to lower prices and consequently lower sales revenues. Operating margin has been affected by strong competition. Further progress has been made in the construction of the Castlemaine meat factory and we announced the closure of the abattoir in Queensland which had been acquired with the KR Castlemaine business.

In the US, Mazola volumes were higher than last year and margins have improved but Capullo volumes remain under pressure in Mexico. The Stratas joint venture is now firmly established and performing in line with expectations. Production at Jacksonville and Champaign, Illinois will have ceased by April.

Ingredients

Operating profit is expected to be well ahead of last year with an improved margin. The yeast and bakery ingredients business has traded well with a strong sales performance from yeast in Latin America and from technical ingredients across the Americas as a whole. Profitability in ABF Ingredients benefited from better lactose prices in the speciality proteins business and from lower overhead costs. Construction of the yeast and yeast extracts plants in Harbin are nearing completion.

Retail

Trading at Primark has been strong and over Christmas was ahead of our expectations. Sales in the first half were substantially ahead of last year reflecting the increase in retail selling space but also an exceptionally strong performance from our 14 Spanish stores and an 8% increase in like-for-like sales across the business. This result was all the more impressive given the strong comparative period last year. The first quarter saw some reduction in gross margin as a result of the higher cost of goods sourced in US dollars when sterling was at its weakest last year. The second quarter benefited from the strengthening of sterling against the US dollar last summer. The impact of these movements on operating profit margins was mitigated, in part, by higher volumes.

At the end of February we will be operating from 196 stores and 6.1 million sq ft of selling space. Since last year end we have opened five new stores: Cambridge and Wood Green in the UK, Frankfurt in Germany, Porto in Portugal and our first store in Belgium, in Li?. We also reopened our store in Waterford in Ireland following a substantial extension. We expect to open a further six stores in the second half, three in Spain and three in the UK in Chester, Bury and Blackburn. Primark has recently agreed to acquire ten Bhs stores which, once refitted, will open progressively during the next financial year adding some 300,000 sq ft of selling space.

For further enquiries please contact: Associated British Foods
John Bason, Finance Director Tel: 020 7399 6500

Citigate Dewe Rogerson Jonathan Clare, Chris Barrie, Nicola Smith Tel: 020 7638 9571

This information is provided by RNS The company news service from the London Stock Exchange

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By Mark Potter

LONDON, Feb 2 (Reuters) - British budget fashion chain New Look launched its long-awaited initial public offering (IPO) on Tuesday, hoping to take advantage of a tentative recovery in new issues and banish the ghosts of the last big UK retail IPOs.
New Look said it planned to raise 650 million pounds ($1 billion) to cut its debts and free it up to invest in opening new stores in Britain and abroad, as well as expand in menswear and childrenswear and on the Internet.
Chief Executive Carl McPhail told Reuters he was cautious about the consumer outlook but was confident New Look's track record of growing in the recession would stand it in good stead.
IPO activity is showing signs of picking up across the world as economic recovery gains hold and private equity firms look to exit investments held over many years.
But investors are wary, with many of last year's big European IPOs still below water.
New Look in particular faces a challenge to overcome disillusion created by the IPO of British department stores group Debenhams, which was floated by private equity owners in 2006 laden with debt and saw its shares plunge over the following 2-1/2 years.
Sporting goods retailer Sports Direct endured a similar fate following its flotation a year later.
"No interest whatsoever in this IPO," said one head of UK equities at a large fund firm on condition of anonymity. "Fantastic company, but coming in at totally the wrong price for the debt structure.
"Why on earth would you want to invest in a company at a valuation that they are proposing to sell at when it is still left with vast amounts of debt, when you can go into the quoted market and buy companies like Next and Home Retail that have no debt, proven management ... and trust and valuations that are much much cheaper," he said.
McPhail said New Look, taken private in 2004 for 699 million pounds by founder Tom Singh and private equity firms Permira and Apax, was different from Debenhams.

The group's net debt would fall to 450 million pounds following the IPO and its strong cash generation meant it would continue to cut its borrowing, he said in a telephone interview.
New Look's owners had also invested about 450 million pounds in doubling the size of the firm and would retain large stakes.
Any sale of shares by existing investors would be limited to an overallotment option to sell about a further 10 percent of stock, he said.
A source close to the matter said New Look hoped to list its shares in London on or around March 1.
New Look, which trades from over 1,000 stores mainly in Britain, reported a 5.9 percent rise in sales at UK shops open at least a year in the 14 weeks to Jan. 2, outperforming rivals such as Marks & Spencer and Next.
"We're absolutely in that sweet spot (for growth)," McPhail said, pointing out that while the UK clothing market had achieved compound annual growth of 1.5 percent between 2003 and 2008, that figure was 5.4 percent for the budget segment of the market and 11 percent for New Look.
He declined to comment on New Look's potential market value. A source close to the matter told Reuters on Sunday it was likely to be 1.7 billion to 2.0 billion pounds.
Analysts have been looking to New Look as a test case for a potential string of British retail IPOs, with fashion company SuperGroup and grocer Ocado also considering flotations.
But a pick-up in investment appetite from private equity firms has given owners of retail businesses an alternative exit.
Last week, private equity firm KKR agreed to buy Pets at Home for what one source close to the matter was a higher-than-expected 955 million pounds.
Budget fashion chain Matalan and sofa retailer DFS are also in talks over possible private equity bids, sources close to the matter have told Reuters. Such sources said previously New Look was also considering possible private equity bids.
"There isn't a dual process as far as we're concerned. We're working towards an IPO," McPhail said, though he added that the group would consider offers if they were high enough.
Credit Suisse, Deutsche Bank and JP Morgan Cazenove are joint sponsors and joint bookrunners of the share sale, while Lazard is joint sponsor. Barclays, Lloyds, and RBS Hoare Govett are co-lead managers, while Investec and Singer are co-managers.

(Additional reporting by Raji Menon and Daisy Ku; Editing by John Stonestreet and David Holmes)

($1=.6278 POUND) Keywords: NEWLOOK/ (mark.r.potter@thomsonreuters.com; +44 20 7542-2943; Reuters Messaging: mark.potter.reuters.com@reuters.net)

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By Nicholas Vinocur and Veronica Ek

STOCKHOLM, Jan 28 (Reuters) - Swedish clothing retailer Hennes & Mauritz stoked hopes for a turnaround in 2010 on Thursday, with a sharp rise in December and January sales and better-than-expected quarterly earnings.
H&M shares shot up 8.9 percent to 438 crowns at 1222 GMT.
The company, which faces stiff competition from retailers such as U.S. group Gap Inc and Spain's Inditex, has weathered the economic downturn better than many rivals thanks to its geographic spread and low-price profile.
But it has undershot sales forecasts for the last three months of its fiscal year, which runs to end-November. H&M turned a corner in December with a 3 percent rise in same-store sales, versus a 1.1 percent fall seen in a Reuters poll.
That was the first positive result for same-store sales since April 2009, and the momentum appeared to carry over to this month as total sales up to Jan. 26 were up 13 percent from a year earlier.
"I would call it a very solid report, profit-wise," said Soren Lontoft Hansen, an analyst at Sydbank.
Also fuelling enthusiasm for H&M shares, Chief Executive Karl-Johan Persson told a news conference the company increased its share of all of its markets in the fourth quarter and was optimistic about 2010.
"Given the economic situation, it's difficult to say what will happen, but we hope for and expect positive like-for-like sales (next year)," he said.
H&M's fourth-quarter gross margin improved to 66.3 percent from 62.4 percent a year earlier, beating forecasts for a flat margin. The company expects a campaign of sharp markdowns in early 2010 to eat into margins in the first quarter.
"It's a stellar gross margin, but you have to wonder whether it's sustainable over the medium term with the likes of (British discount clothing chain) Primark expanding into Germany," said Luca Sola, an analyst with Bernstein in London.
Germany is H&M's biggest market, accounting for about a quarter of total revenue.
H&M, which has pioneered a strategy of offering high-profile brand names like Jimmy Choo and Sonia Rykiel at knock-down prices, posted fourth-quarter pretax profit of 7.99 billion Swedish crowns ($1.10 billion), beating an expected 6.97 billion crowns in a Reuters poll of 25 analysts.

H&M may face its toughest competition further down the price chain, with British discount retailer Primark and online clothing store ASOS both posting double-digit rises in sales during the crucial Christmas shopping period.
"Whereas UK retailers saw a good cyclical recovery coming through last year, perhaps the European retailers have been lagging that a bit," Anne Critchlow, analyst at SG Securities, said. "But perhaps finally it's come through for them."
"It's hard to strip out the effect of markdowns and how that might have boosted sales, but on the face of it, it looks like a bit of turnaround (for H&M)," she added.
H&M is betting on store expansion and markdowns in its first fiscal quarter to counteract the lingering effects of the global economic downturn. It plans to open about 240 outlets in 2010.
Despite signs consumer sentiment is improving, euro zone retail sales still fell more than expected in November.
Retail sales in Sweden rose 0.2 percent in December from November and were up 4.5 percent from a year earlier, the statistics office said on Thursday.
The figures compared with expectations for a monthly rise of 0.8 percent and an annual increase of 5.3 percent. ID:nLDE60L1Y5]
Inditex's shares were up 3.8 percent at 1222 GMT, signalling a general rise in confidence in the sector following H&M's figures. The DJ retail index was up 2.0 percent.

($1=7.289 Swedish crowns)

(Additional reporting by Katarina Gustafsson in Stockholm and Mark Potter in London; Editing by Rupert Winchester) Keywords: H&M/ (Stockholm Newsroom, tel: +46-8-700 1017, e-mail: stockholm.newsroom@reuters.com)

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Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.