Associated British Foods (ABF) has reported its grocery operating profit increased by 24% in the year to 13 September 2014, although growth was affected by low sugar prices in the EU.
The group, which owns Kingsmill through Allied Bakeries, posted an overall adjusted profit before tax rise of 2% to £1,105m, with a net capital investment of £691m.
At Allied Bakeries, revenues and profit were ahead of last year, with higher branded sales and an increase in market share. Successful new products this year included Kingsmill Great White, launched in February and supported by an in-store marketing campaign and television advertising. Also credited was the new resealable packaging, with a refreshed design, which drove further growth of Kingsmill wraps, while Sandwich Thins were launched later in the year.
Following its relaunch last year, the Allinson brand received further national advertising support this year and “achieved further growth”.
The five-year capital investment programme to upgrade ABF’s UK bakeries is almost at an end, with a new bread plant in Stevenage due to be commissioned in November. The closure of the Orpington bakery was proposed in August and employee consultation is almost concluded.
Held back by sugar
George Weston, chief executive of ABF, said: “I am pleased to report growth of 6% in adjusted earnings per share. Significant progress was achieved in operating profit by Grocery, Agriculture, Ingredients and Primark, all of which substantially outperformed last year. Primark’s trading success and significant expansion delivered another magnificent year. Much lower sugar prices in the EU held back the group’s profit growth although, operationally, sugar performed well.”
Meanwhile, Silver Spoon’s revenue and profitability was “well below last year”, but revenue and profit at Jordans and Ryvita were ahead of last year, with “good growth” in the international side of the business. On 20 October, ABF received clearance from the Competition and Markets Authority to complete the acquisition of Dorset Cereals, which it hopes will complement its Jordans cereals and Ryvita crispbread brands.