Associated British Foods said it would take a charge of approximately 200 million British Pounds for restructuring and impairment costs related to the closure of its Vivergo bioethanol plant and actions in its Spanish sugar business.
The company announced the plant's closure after it said the U.K. government decided not to provide the support required for the business to be consistently profitable.
Of the total charge, around 50 million British Pounds are cash costs, the company said in a trading update on Wednesday.
The owner of the Primark fashion chain also updated its retail performance, expecting second-half sales growth of around 1%, driven by new store openings.
However, sales at stores open for more than a year are expected to be down about 2% in the same period.
The company reported strong sales growth in the U.S. and improved trading in the U.K., but noted a weaker consumer environment in Europe.
"This has also been a busy period strategically, including the decision to close the Vivergo bioethanol plant, the restructuring of our Spanish sugar business, and an agreement for Allied Bakeries to acquire Hovis to create a financially sustainable UK bakeries business," said Chief Executive George Weston.
Following the closure, the company's Sugar segment is now expected to have an adjusted operating profit close to breakeven for the full year.
More from this issuer
Related coverage
Associated British Foods is reviewing a potential separation of its Primark fashion chain and its food businesses, the company said on Tuesday, as it reported a fall in annual profit.