Half-year profits from Associated British Foods’ grocery business rose almost 30% as the company lapped last year’s figures, which included restructuring costs in the UK and Australia.
ABF booked a 29.3% increase in operating profit from its grocery unit to GBP97m (US$147.6m) for the 24 weeks to 2 March.
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Sales were up, inching up 1% to GBP1.83bn, but ABF pointed to the “non-recurrence” of costs to revamp its Allied Bakeries business in the UK and Australian arm George Weston Foods.
ABF said the UK bread market “remains highly competitive” but insisted it had recovered higher costs associated with last year’s low wheat harvest in the country.
Revenues at George Weston Foods were “in line with last year”. The Australian bread sector was “difficult” with a high level of promotions but ABF secured price increases for its Tip Top brand. In the US, sales and profits at the company’s ACH business increased.
Sales from ABF’s sugar business increased but profits were down, as forecast, amid tough trading in China, where the company also mothballed two plants.
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By GlobalDataAdjusted group operating profit was up 10%, with revenue also increasing 10%.
Shares in ABF were up 1.73% at 1,882p at 09:28 BST.
Click here for the company’s results statement.
Click here for a round-up of how CIty analysts viewed ABF’s results.
