ABF has reported revenue up 11% to £12.3bn and adjusted operating profit up 17% to £1,077m for its financial year. Operating profit was up 4% to £873m, and profit before tax level at £761m.
“These are very good results for the group and include exceptional performances from AB Sugar and Primark,” said George Weston, chief executive of Associated British Foods.
“Global economic uncertainty remains but we have opportunities for further investment and the strength of the group balance sheet and a strong cash flow will enable us to pursue them with confidence.”
The company said that AB Sugar delivered a first-class result, exceeding last year’s record profit following the investment made in recent years. The business benefited from an excellent UK campaign, a strong European commercial market and better sugar yields across southern Africa.
ABF said that the year was not without its challenges, however, as evidenced by the results of its Grocery and Ingredients business segments. Although Twinings Ovaltine delivered another good result with continued growth, particularly in its developing markets, a mix of strong competition, a continued strain on consumer spending and high costs for a number of commodities led to lower profitability in both of these segments.
A combination of management action to reduce the cost base together with increased investment in marketing and new product development, enabled most of the businesses in these segments to enter the new financial year on a sound footing, said the company.
Recent years have, said ABF, seen substantial capital investment in the food businesses with a number of projects spanning several years. These have now largely come to an end and its capital expenditure was lower as a result. Investment during the year included construction of the relocated sugar factory at Zhangbei in China and a new yeast plant in Mexico.
