Associated British Foods (ABF) – the company behind Kingsmill – has revealed that lowering sugar prices would impact its profits in the year ahead.

In a pre-close trading update, ABF said it expected revenue and profit from its sugar division in the first half of the year to be “substantially lower” than last year - because  of a reduction in EU sugar prices, ahead of reforms in 2017.

However, it added: “A much lower profit from sugar will be offset by another excellent performance from Primark and encouraging results from grocery and ingredients.”

Net debt at the half year is expected to be £0.9bn, £0.4bn lower than the same period in 2013.

In a statement, it added: “Allied Bakeries made progress in the highly competitive UK bread market and volumes and margins will be ahead of last year.

“A new bread plant was commissioned at West Bromwich as we approach the end of a major capital investment programme in our UK bakeries. This programme delivers less waste, better control of our processes and consistently high-quality bread.”