Resilient Performance From ABF
Associated British Foods has reported 2% increase in full-year group revenue to £15.8 billion and a 1% rise in adjusted operating profit to £1.421 billion, at constant currency, despite the radical change in the European sugar market which adversely impacted the business. ABF’s non-sugar activities increased profits, mainly driven by strong performances from the Grocery and Primark retail businesses.
The Grocery businesses delivered strong underlying profit growth of 14% after adjusting for the £12 million cost for the closure of the Twinings tea factory in China. George Weston Foods in Australia, ACH in the US and Acetum all delivered robust margin improvements through better procurement and cost reduction. ABF continued to invest in its Grocery manufacturing capability and the new facilities commissioned for Ryvita and for noodle production will increase capacity and product innovation.
ABF is committed to reducing the operating losses this coming year at Allied Bakeries, with a programme of cost reductions, following the closure of the Cardiff bakery at the end of the financial year. ABF is continuing to develop its presence in the faster growing segments of the grocery market and sees much potential from its recent acquisitions of Yumi’s in Australia and Anthony’s Goods in the US.
Primark marked its 50th anniversary by delivering an 8% increase in profit as 14 new stores were added across the UK and continental Europe during the year. ABF expects France, Italy, Spain, eastern Europe and the US to provide the most significant prospects for further growth at Primark.
George Weston, chief executive of Associated British Foods, says: “The group delivered a resilient performance this year, with strong profit growth from Grocery and Primark which more than offset the profit decline in Sugar. We continued to pursue the opportunities to grow our businesses with a gross investment of over £800 million. Next year the group is well-positioned for further progress, with the continued expansion of Primark, a material improvement in our Sugar profit and strong profit growth in Grocery.”
