UK: ABF sales rise on pricing, FX
Associated British Foods today (9 July) posted a jump in revenue for the first nine-months of the year, boosted by pricing activity and the weakness of the pound.
In a trading update this morning, ABF said total revenue for the 40 weeks to 20 June rose 19% year-on-year. Stripping out the impact of currency exchange, ABF sales were 8% up on last year's figures.
The Kingsmill-to-Ryvita maker revealed that its grocery business showed the slowest growth, with sales rising 17% during the three-month period.
The performance of the group's food unit was bolstered by price increases, which were mainly pushed through in the first half, and "some" volume expansion.
Volumes at the group's UK Allied Bakeries unit were hit by the loss of own-label and some branded business. However, the company emphasised that profit was ahead in the third quarter as margins improved.
In Australia, the company saw the opposite affect on its Castlemaine meat business, as volumes increased but margins came under pressure from rising costs.
The company's sugar and ingredients businesses boasted a stronger showing, with sales up 21% and 22% respectively. Ingredients margins especially benefitted from the end of forwards-purchasing contracts locking the company into higher oil prices at its US oil business ACH.
The company's agriculture and retail businesses also saw revenue gains over the period, with sales rising 19% and 21%.
Looking to the full year, ABF said that it expects to deliver "progress" in its operating profit in the second half.
"We still expect little change in earnings for the full year as the increase in operating profit will be broadly offset by a higher interest charge," the company said.
ABF shares dipped slightly in morning trade, falling 0.39% to 762 pence at 11.13 am (BST).
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