Associated British Foods saw its share price dip this morning (5 November) as an expected drop in sugar earnings weighed on its outlook, despite an improvement in grocery.

Reporting its full-year results today, the Kingsmill producer said EPS in the current fiscal year will be “similar” to 2013 as a further reduction in profit from AB Sugar is predicted next year. The group’s shares were down 3.10% to 2,192 pence at 09:33 in London trading.

Net profit for the 52 weeks ended 14 September amounted to GBP634m (US$1.02bn), an 8.7% increase on the prior year. Operating profit was up 25% to GBP1.09bn.

In ABF’s grocery division, grocery margins improved with a recovery in both the baking and meat businesses of George Weston Foods in Australia. This improvement pushed operating profit up 24% to GBP232m and sales up 3% to GBP3.84bn.

The company, however, noted an “earlier than anticipated weakening” of EU sugar prices, ahead of the now confirmed reform of the European sugar regime in 2017. This is expected to reduce AB Sugar’s profits further, ABF said. In the period, operating profit fell 15% to GBP435m, while sales remained flat at GBP2.66bn.

Group revenue climbed 9% for the year to reach GBP13.3bn.

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“I am delighted to report that the group has again delivered a great set of results,” said chief executive George Weston. “Grocery was much improved, Agriculture achieved record profits, Sugar was in line with our expectations and it was a remarkable year for Primark.”

Click here to view the full earnings release.