Losses at Allied Bakeries have been ‘much reduced’ thanks to improved sales and operational performance, according to owner Associated British Foods (ABF).
In its latest results for the 52 weeks ended 14 September 2024, ABF said the improved performance vs 2023 was also partially a result of a significant increase in marketing investment.
Allied Bakeries produces a range of bakery products under the Kingsmill, Sunblest and Allinson’s brands. It also encompasses Speedibake which specialises in own label baked goods, such as muffins and mince pies, for retail and foodservice customers.
Overall ABF grocery sales were up 4% in constant currency to £4.2bn and adjusted operating profit was up 17% to £511m. Strong margin improvement was also noted and attributed to an easing of input cost pressures, strong performance in the US-focused businesses, and Allied Bakeries’ improvement. UK businesses – including Allied Bakeries, Silver Spoon, and Ryvita – account for approximately a quarter of the above grocery sales.
Turning to the ingredients division, ABF reported a 2% increase in actual currency resulting in revenue of £2.1bn. This was driven by a strong performance in yeast and bakery ingredients business, AB Mauri.
ABF is also driving growth through acquisitions. It acquired Romix, a specialist blender of baking ingredients based in the UK, and Mapo, an Italian manufacturer of premium frozen baked goods which the business said underpins the growth potential for Scrocchiarella bakery products. Notably, it is also investing in the manufacturing capacity for Scrocchiarella, which specialises in premium Italian sourdough flatbreads, in Bradford.
George Weston, chief executive of Associated British Foods, described the year as one of “very strong financial and operational progress”.
“We delivered a substantial improvement in profitability, excellent cash generation and strong returns as a result of consistent, multi-year investment and a return to some normality in our markets and supply chains,” he said. “Our food businesses delivered good growth and strong profitability this year. We are benefitting from an easing in input costs, as well as our increased investment in marketing, strong commercial execution and good product innovation”
Weston added that the business believes its “long-term, patient investment approach” will deliver strong returns and create value for stakeholders.
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