FDBusiness.com

Associated British Foods has reported a 10% increase in revenue to £10.2b and adjusted operating profit up by 26% to £909m for 2010. With 56% of sales and 46% of operating profit generated outside the UK, the translated results of overseas businesses benefited from the weakness of sterling. At constant currency, and adjusted for the impact of acquisitions and disposals, group revenue increased by 6% but profit was little affected and was still 25% ahead. Reported operating profit was up 31% to £819m and profit before tax advanced 54% to £763m.

Revenue exceeded £10b for the first time with strong underlying trading from all five of the group’s business segments – grocery, sugar, ingredients, agriculture and retail (Primark). Grocery margins improved, there was an excellent result for sugar and an outstanding performance from Primark.

Grocery revenue increased by 7% to £3.4b driven mainly by the benefit of currency translation on the sales of George Weston Foods in Australia. At constant currency, sales were level with last year. Adjusted operating profit rose from £191m to £229m.

George Weston, chief executive of Associated British Foods.

The results from sugar improved substantially with revenue ahead by 32% to £1.94b primarily as a result of a full year’s sales from Azucarera, acquired in April 2009, but also with good growth in the UK and from cane sugar in China. This revenue growth, together with an improvement in UK and Chinese margins, drove a profit increase of 43% to £240m. Ingredients achieved a revenue increase of 8% over last year to £1.07b and operating profit rose by 18% to £104m.

“This year’s outstanding results represent a step change for the group. A number of major projects will be completed over the coming year which will underpin future profit delivery and provide a platform for further growth. Opportunities for further attractive investment are plentiful and the group has the financial capacity to exploit them,” says George Weston, chief executive of Associated British Foods.