Skip to content
Search
AI Powered
Latest Stories

AB Foods says effect of coronavirus on supply chains ‘continues to evolve’

Primark owner Associated British Foods warned on Monday there was a risk of shortages of some clothing lines later this year if delays in factory production in China are prolonged because of the coronavirus.

The virus has killed 2,442 and infected 76,936 people in China, and slowed growth in the world's second largest economy.

AB Foods, which sources more than 40 percent of Primark's product from China, said it typically builds inventories in advance of Chinese New Year, meaning it is well stocked for several months and does not expect any short-term impact.

The group, which maintained its overall financial guidance for the full 2019-20 year, said it was working closely with its suppliers in China to assess the impact of the virus on their factories and supply chains and their ability to fulfil its current orders.

"If delays to factory production are prolonged, the risk of supply shortages on some lines later this financial year increases," it said.

"We are assessing mitigating strategies, including a step up in production from existing suppliers in other regions."

AB Foods also owns major sugar, grocery, ingredients and agriculture arms. Several of its food businesses have operations in China.

It said the China sugar processing campaign was completed in January before the coronavirus outbreak developed significantly.

However, its AB Mauri, AB Agri and Ovaltine factories are operating at reduced capacity because of labour and logistics constraints caused by the virus outbreak.

Finance director John Bason said the impact was not material to the overall group.

For its first half to Feb. 29, AB Foods forecast sales and operating profit ahead of the previous year.

Revenue in the grocery business is expected to be in line with last year, with higher sales at George Weston Foods in Australia and the first contribution from Anthony’s Goods in the US offset by lower sales at Allied Bakeries.

The company said the fire at Wakefield Speedibake factory in early February has resulted in in significant damage.

Twinings revenues were ahead of last year, driven by growth in black teas and excellent sales of herbal teas. AB World Foods achieved good sales growth in the period, driven by strong sales at Blue Dragon in the UK and increased Patak’s sales in Europe and North America.

Allied Bakeries revenues declined, but the company said it has reduced the operating loss with the ongoing cost reductions programme.

The group's outlook for the full-year was unchanged, with progress expected, on both a reported and a lease-adjusted basis, in adjusted earnings per share (EPS).


(With Reuters Inputs)

More for you

'Walkable high streets boost economy'
(Photo by Christopher Furlong/Getty Images)
Getty Images

'Walkable high streets boost economy'

Shoppers who walk and wheel spend more than those arriving by car, states a recent report, demonstrating the significant economic and social benefits of investing in walkable town centres, challenging traditional views on urban accessibility.

The findings published in third edition of "The Pedestrian Pound Report", recently published by Living Streets, the UK charity for everyday walking, come at a critical juncture for British high streets, with a record number of retail failures in 2022 and a vacancy rate of nearly one in seven by the end of 2023.

Keep ReadingShow less
Yvette Cooper

Home secretary Yvette Cooper speaking at the annual conference hosted by the NPCC and APCC on 19 November 2024

Photo: GOV.UK

Home secretary pledges to restore neighbourhood policing

Home secretary Yvette Cooper has announced plans to rebuild neighbourhood policing and combat surging shop theft as part of an ambitious programme of reform to policing.

In her first major speech at the annual conference hosted by the National Police Chiefs’ Council and Association of Police and Crime Commissioners on Tuesday, Cooper highlighted four of the key areas for reform: neighbourhood policing, police performance, structures and capabilities, crime prevention.

Keep ReadingShow less
Andrew Bailey acknowledges retailers' warning on job cuts
Bank of England building on Threadneedle Street, CLondon (Photo: iStock)
Getty Images/iStockphoto

Andrew Bailey acknowledges retailers' warning on job cuts

Retailers are right to warn of potential job cuts as a result of tax increases announced at last month’s budget, Bank of England governor Andrew Bailey has said.

Bailey appeared before the cross-party Treasury select committee on Tuesday (19), after almost 80 retailers claimed rising costs would make “job losses inevitable, and higher prices a certainty”.

Keep ReadingShow less
High Street shopping street
Photo: iStock

High Street Rental Auctions: Independent retailers urged to engage with local councils

The British Independent Retailers Association (Bira) has urged independent shop owners to reach out to their local councils about the government's newly announced High Street Rental Auction (HSRA) powers, which aim to tackle persistently vacant commercial properties on UK high streets.

Introduced through the Levelling Up and Regeneration Act 2023, the HSRA legislation will come into force on 2 December. It will give local authorities the ability to put the leases of long-term empty shops up for public auction, allowing businesses and community groups to secure short-term tenancies.

Keep ReadingShow less
Home energy smartmeter
Photo: iStock

Inflation jumps in October on higher energy bills

Britain's annual inflation rate jumped more than expected in October to back above the Bank of England's target as households and businesses faced higher energy bills, official data showed Wednesday.

The Consumer Prices Index reached 2.3 per cent from a three-year low of 1.7 percent in the 12 months to September, the Office for National Statistics said in a statement.

Keep ReadingShow less