Associated British Foods, the UK food group, said today (17 January) that trading is “fully up” to the company’s expectations, despite a fall in revenue from its sugar business.
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In a trading update, the company reported a 13% rise in group sales for the 16 weeks to 5 January. ABF’s retail arm Primark boosted the figures but revenue from its grocery business was up 15% on the year, thanks mainly to its Twinings tea and Ovaltine brands.
ABF’s bakery operations have suffered in recent months, prompting questions over the future of the business. However, the Kingsmill baker said the business’ “improvement” was continuing.
Sugar revenues were down 12% on the year as ABF cycled last year’s figures that benefited from the early shipment of export sales from the UK. The company warned that EU sugar reform and higher energy costs would lead to lower profits from its UK sugar business.
Costs have also hit ABF’s margins in the US, the company said. ABF said its ACH business in the US had boosted prices to offset “sharp increases” in corn and soy oil costs.
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By GlobalDataThe update cheered the market, with shares up 6.7% to 827p at 09:47 GMT this morning.
