Associated British Food’s (ABF) results for the year ended 13 September 2008, have revealed positive revenue growth despite economic challenges, according to a statement released by the company, with group revenue up 21% to £8.2bn. Operating profit for the food, ingredient and retail group stands at £554m, whilst adjusted operating profit has increased 7% to £664m.Revenue increased in its ingredients division by 21%, however adjusted operating profit only increased from £71m last year to £75m this year. ABF has made “good profit progress” within the area of yeast and bakery ingredients, and said it is “continuing to grow our bakery ingredients business, both through craft and industrial channels”.
Despite sharp rises in input costs, particularly raw materials and energy, chief executive George Weston said: “These good results demonstrate the resilience of the group.” In the company’s statement, chairman, Martin Adamson commented that “there was strong improvement in the performance of Allied Bakeries following the very successful relaunch of Kingsmill in 2007”.
Adjusted operating profit for its sugar division fell to £153m compared to £199m last year, though the company notes this is down to the impact of EU Sugar reform. Its Agriculture division saw adjusted operating profit increased to £33m compared to £18m in 2007, which was partly put down to stronger feed prices offsetting higher costs.
Within grocery, adjusted operating profit increased to £194m compared to £153m last year, with revenue increasing by 25% over the same period. According to the company statement: “This was driven through a combination of acquisitions, price increases to recover commodity cost inflation and volume growth.
“Considerable further investment was made during the year, particularly in the expansion of our sugar interests in China and Africa and also in our grocery and ingredients businesses,” said Adamson. “In Europe the transition to the new EU sugar regime is largely over and there is now the prospect of reasonable equilibrium in a market where consumption will exceed domestic product.”
ABF employs around 96,000 people in 44 countries across the sugar, agriculture, ingredients, grocery and retail sectors.