- Group sales flat
- FY earnings expectations see "modest" dip
- Rebuilding volumes at Allied Bakeries
Associated British Foods has said it is increasing volumes at Allied Bakeries but conceded margins remain under pressure at the struggling UK bakery unit.
In a trading update for the first nine months of the company's financial year, released this morning (9 July), ABF said Allied Bakeries was "rebuilding" its presence in Tesco – the UK's largest grocer – after the company delisted its Kingsmill brand earlier this year. "Allied Bakeries is successfully increasing its volumes and is rebuilding Kingsmill's presence in Tesco, although its margins remain under pressure," ABF said in a filing.
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Elsewhere, ABF was upbeat on its grocery performance, which, it said, remains "on track". In particular, the company stressed its George Weston Australian meat business was improving, with lower raw material costs, higher volumes and "much lower" factory production costs.
On a group-wide basis, including ABF's sugar and retail interests, the company said nine-month net sales were flat year-on-year. Excluding currency exchange, sales were up 2%. The company reiterated its full-year earnings expectations of a "modest decline" in adjusted EPS.
