Associated British Foods, the maker of Kingsmill bread, today (22 April) pointed to a “much improved” performance from its bakery business after a 9% rise in half-year profits.
Underlying operating profit reached GBP296m (US$586.5m) for the six months to 1 March, as its grocery business, which also includes brands from Patak’s to Twinings tea, saw profits rise by over a third. Turnover was up 15% to GBP3.7bn.
ABF said higher bread volumes in the UK had boosted its local bakery business, which had been suffering in recent months amid rising wheat costs. However, the company has managed to get price increases through and the relaunch of Kingsmill has helped sales.
Profits from ABF’s ingredients division rose 6% but earnings from its sugar business tumbled by a third amid reform to the EU sugar industry, while poor weather hit crop levels.
Nevertheless, chief executive George Weston was upbeat about the performance of the business as a whole.
“Despite the challenge of rapidly rising commodity and energy costs faced by many of our businesses, revenue and profit from grocery, ingredients and agriculture all grew strongly,” Weston said. “These good results demonstrate that the group remains on track.”