Down The Aisle... Sugar Prices Rise
Sugar, Premier Foods, Glisten, Fyffes, Uniq, L'Oreal
Sugar prices have hit a three-year high spurred by concerns that India, the world's largest consumer and producer, could suffer another disappointing sugar cane harvest next season. India's sugar production dropped 40% this year to less than 15m tonnes, forcing the country to import to cover its shortfall and prompting a wave of commercial and speculative buying. Consumption hovers at 20m-21m tonnes.
Premier Foods, the UK's biggest food manufacturer, has said that its profit forecasts for the full-year remain unchanged after trading in May and June continued in line with trends seen in the first four months. Sales in its grocery division had continued to see good growth driven by new product launches and promotional activity. Premier said its bread business had seen excellent sales and market share growth as the company continued to invest behind its re-launched Hovis brand. The group said its chilled division continued to see good sales growth from meat alternative Quorn and retailer branded products but profitability had been reduced by a high level of marketing investment and increased manufacturing costs in the meat-free business.
UK food group Glisten has reduced its profit forecasts for the full year. The company is reducing its full-year operating profit forecast to around £5.8m, compared with £8.0m in 2008. Pre-tax profit is now forecast to reach around £4.0m, against earlier guidance of £6m. The downgrade follows the uncovering of "apparent failures in accounting practice and management process" at its Halo Foods division.
At the beginning of the year, Fyffes indicated that it was targeting an Adjusted EBIT for 2009 in the range of Euro 14m- Euro 18m. This target was based on achieving increases in average selling prices in all markets to offset the impact of cost inflation and less favourable exchange rates compared to last year. In the year to date, Fyffes' key input costs have been c.20% higher than last year, including the impact of exchange rates. Offsetting this, market conditions have been generally favourable in recent months, particularly in Continental Europe. The Group has achieved increases in average selling prices and has benefitted from the positive impact of its currency hedging. Fyffes continues to seek increases in selling prices, in all markets, to address the underlying increase in costs.
Shares in Uniq have risen as much as 9.7% to an eight month high after the British convenience food maker sold its French business to focus on its UK operations.
L'Oréal, the French cosmetics giant, was found guilty today of racial discrimination after the highest court in France heard that executives had sought an all-white team of sales staff to promote its shampoos. La Cour de Cassation was told that Garnier, L'Oréal's beauty products division, tried to keep black, Asian and Arab women from selling its Fructis shampoo in French supermarkets.Adecco, the temporary recruitment agency whose Districom division hired the hostesses, was also found guilty of racial discrimination.
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