Associated British Foods has edged down its full-year earnings guidance on foreign currency concerns, it said on Tuesday.

The firm met forecasts with a 2 per cent fall in first-half profit as growth at its discount fashion chain Primark was offset by continued weakness in its sugar operation and said its trading outlook for the full 2014-15 year was unchanged.

However, with sterling’s continuing strength against most of its major trading currencies, and the transactional impact of euro weakness on the results of Primark and British Sugar, it forecast a “modest” decline in adjusted full-year earnings per share from the 104.1 pence made in 2013-14.

The firm had previously forecast a “marginal” decline.

AB Foods made an underlying operating profit of £474 million in the six months to Feb. 28.

That compares to analysts’ average forecast of £475 million, according to Reuters data, and £497 million made in the previous corresponding period.

Underlying earnings per share rose 1 per cent to 46.1 pence and the firm is paying an interim dividend of 10 pence, up 3 per cent.

The group said Primark's plans for its entry into the north-east of the United States were well advanced.

It said for the full year, its grocery, ingredients and agriculture businesses would make further progress in operating profit.

As previously guided it said low EU sugar prices and continued weakness in the world sugar price would result in a large reduction in profit in its sugar business compared with last year.

Reuters