Associated British Foods has said that its operating performance in the second half of the year was ahead of expectations with margin expansion at its grocery business.
ABF lifted its outlook and stated that it now anticipates earnings per share to come in “marginally ahead” of last year in its pre-close trading update released ahead of its full-year results in November. In the 53 weeks to 17 September, ABF added that its operating profit would now also be ahead of last year.
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Looking at the group’s grocery business, which includes brands such as Kingsmill and Jordans, the company said revenues are expected to be “marginally” up on 2015 thanks to a “good underlying performance”. Revenue was lifted by an extra trading week but dented by commodity price deflation, ABF noted.
“Operating profit at constant currency will be higher than last year with a further improvement in margin,” ABF said.
The company revealed that its Allied Bakeries unit “held up well” despite discounting in the bead aisle. Meanwhile, the full integration of Dorset Cereals with Jordans and Ryvita delivered the “expected savings”. Jordans and Dorset growth was supported by international expansion and increased UK market share but Ryvita lost share of the UK crisp bread market.
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