Annual sales and profits from Associated British Foods’ grocery business are expected to have risen over the last 12 months, the UK-based company said today (12 September).
The performance of ABF’s Jordans Ryvita division – which saw sales and margins increase – stood out as the company revealed that revenues and profit from its food business for the year to 17 September were set to be “ahead” of the previous 12 months.
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However, ABF’s shares fell as it revealed that second-half operating margins from its discount retail business Primark were expected to be lower than it had forecast.
ABF reported that adjusted company annual earnings would be “similar” to a year earlier, a period, it said, that benefited from an extra trading week.
Profits from the company’s grocery business, which takes in operations in the UK, Australia and the US, benefited from a lower charge from restructuring.
ABF said its UK grocery businesses had “performed well”, with Jordans Ryvita enjoying a “very strong year”. The division reported “good sales growth” and a “substantial improvement in margin”.
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By GlobalDataThe company’s Allied Bakeries business “traded well” but saw margins “tighten” due to a rise in promotional expenditure and only a partial recovery of higher wheat costs.
In Australia, ABF said its George Weston Foods unit saw revenues fall and operating profit drop “substantially” due to what the company describe as “difficult trading conditions”. Promotions and a switch to private-label bread hit margins from ABF’s bakery business. George Weston Foods’ meat unit made “some progress in underlying trading” but that was offset by costs from a new factory in Victoria.
In the US, ABF said margins from its ACH unit were “compressed” as the company found it difficult to fully recover increases in commodity costs. Profits from the company’s Stratas venture improved due to cost cuts.
Shares in ABF were down 1.87% at 14:21 today. The company will report its full-year results on 8 November.
