UK: ABF grocery margins climb in Q1
Associated British Foods today (14 January) revealed that rising sales and changes to the way it runs its grocery business had helped profits from the division in the first quarter of its financial year.
The UK-based group said underlying profit margins were "much improved" compared to last year during the 16 weeks to 2 January on the back of restructuring moves and a 4% rise in grocery sales.
ABF said a "strong performance" by its Twinings Ovaltine division and the benefit of a strong Australian dollar more than offset falling consumer oils sales in North America and meat sales in Australia.
In ABF's UK grocery business, revenues were "broadly level" with last year but profit margins were ahead thanks to restructuring work undertaken in the last 12 months.
Group revenue from ABF's continuing businesses was 17% ahead of the same period last year. Sterling weakness, particularly against the euro and the Australian dollar, contributed to the increase. At constant exchange rates, revenue was up 11%.
Ingredients sales were 11% ahead and on a constant-currency basis were 5% higher. ABF pointed to "strong sales" from its yeast and bakery ingredients business in the Americas. Profits in ABF Ingredients benefited from better lactose prices in the speciality proteins business and from lower overhead costs.
Sugar revenues, excluding results for the Azucarera business acquired in April, were 23% ahead of last year. Including Azucarera, sales were up 68%.
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