Successful Year For Associated British Foods
Reflecting its international diversity and a strong underlying performance across its businesses, Associated British Foods has reported a 15% increase in group revenue to £15.4 billion and a 15% rise in adjusted operating profit of £1.363 billion for 2017. Statutory operating profit was up 21% to £1,.336 billion, and with the benefit of a profit on the sale of businesses, profit before tax jumped 51% to £1.576 billion as basic earnings per share rose 47% to 151.6p.
With over 60% of group sales and profits now generated outside the UK, the headline results benefited from the weakness of sterling. However, growth was very strong on a constant currency basis with revenue and adjusted operating profit ahead by 6% and 13% respectively.
ABF has been successful in transforming its sugar business over the past few years with the sale of the cane sugar operations in south China this year, the move to full ownership of Illovo last year and the benefits delivered by the performance improvement programme over many years. ABF reported a substantial increase in Sugar profit this year which benefited from all of these initiatives and an increase in EU sugar prices. Illovo is making good progress with its accelerated programme of commercial development and the delivery of further production efficiencies. In the EU, ABF has established a low cost business which is positioned to exploit the market opportunities and associated freedom to export, following the abolition of sugar quotas in October 2017.
In Grocery, Twinings Ovaltine, ACH in the US and George Weston Foods in Australia all increased adjusted operating profit. However, a difficult trading environment in the UK bread market led to a decline in revenues at Allied Bakeries and it sustained a loss.
George Weston, chief executive of Associated British Foods, says: “This was a highly successful year for the group. These results reflect our international diversity, and the strong underlying performance of our businesses was driven by management actions throughout the year. Capital investment was a record as we continued to pursue the opportunities to grow our businesses into the future.”
