Allied Bakeries has revealed it recovered high wheat costs through bread price increases during the last financial period, as parent company Associated British Foods saw revenues increase by 10%.
The group announced the news of its latest financial performance as part of an interim management statement, published this morning, for the 16 weeks to 5 January.
The ingredients business saw revenues for its yeast and bakery ingredients close to last year across all regions, with ABF Ingredients revealing that sales of extruded grain products were “well ahead of last year” and lactose prices “remained strong”.
ABF’s UK grocery division reported sales in line with last year’s performance, with full-year figures expected to be ahead of 2011/12, which the company has said will benefit from “the non-recurrence of restructuring costs” in Allied Bakeries, as well as Australian food business George Weston, known for its Tip Top bread brand.
ABF said a 25% increase in sales at discount clothing business Primark, as well as a 12% lift in revenues within its sugar business, helped to contribute to its 10% growth in revenue for the 16-week period.
Graham Jones, executive director at financial analyst Panmure Gordon, said: “We raise our earnings per share forecast for 2013E by 3.2% from 92p to 95p, equating to 8.9% growth following on from 17.8% growth in 2012A. We also reduce our net debt forecast by around £100m to £0.9bn at Sept 2013E.”
For the grocery division, the City analyst said he expected full-year ebitda to rise from £187m to £243m, which he believed would be helped by lower restructuring charges.
In terms of ABF Ingredients, he added: “The market remains competitive and we now expect ebitda to be flat this year at £32m, although, with a new chief executive, we are hopeful that profits will start to improve next year.”