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Associated British Foods: revenues up
graeme at 7:59 a.m. Thu 09 Jul 2009
Associated British Foods’ trading statement emphasized revenue growth but the headline number of 19% is something of an overstatement of underlying growth for two reasons:
- It exclude disposals, but include acquisitions — a common practice, but an unfortunate one.
- Some businesses have benefited from exchange rate changes (i.e. the weak pound over the year)
One business which continues to produce strong organic growth is Primark. Its revenues where up 21% in the third quarter, better than in the first half. Like-for-like growth was “excellent”, so margins probably improved as well.
Growth in some businesses (such as groceries) was driven by price increases. There was also substantial expansion in several businesses, so ABF is still a comparative growth story for its sector.
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