A jump in sugar revenues, on the back of high prices, has helped drive sales at Associated British Foods.
The UK-listed group today (19 January) reported a 12% increase in sales at ABF for the 16 weeks to 7 January.
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Revenues from ABF’s sugar division jumped 21% due to “high regional sugar prices, particularly in Europe”, the company said.
The company said it expected “strong profit delivery” from its British Sugar unit in the UK and added that earnings from its Spanish sugar operations were “well ahead” of last year.
ABF, which owns food brands including Kingsmill bread and Jordans cereals, said its grocery sales increased 4% on the year.
It reported “encouraging” grocery sales in the UK although it admitted competition had affected margins from Kingsmill.
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By GlobalDataABF’s grocery business also includes divisions in the US and Australia. Revenue from its ACH unit in the US was “level” with last year, the company said.
However, it warned that trading at its George Weston Foods in Australia was “difficult”.
It added: “The half-year result will include the cost of restructuring currently in progress. The costs of operating the new Castlemaine meat factory continued to be too high but progress was made in improving productivity.”
ABF, the owner of the discount retail chain Primark, which reported a 16% increase in sales, said overall group trading was “in line with expectations”.
The company said it expects annual sales and adjusted operating profit to grow with the improvement in earnings to be “weighted towards the second half”.
Shares in ABF were up 2.2% at GBP11.62 at 11:07 GMT.
ABF will report its half-year financial results on 24 April.
