Profits up for ABF post referendum

Allied Bakeries owner Associated British Foods (ABF) has reported 5% year on year growth in group revenue to £13.4bn in the 53 weeks to September 17 2016.

Revenues at Allied Bakeries rose thanks to an increase in Kingsmill sales, boosted largely by the success of Kingsmill Sandwich Thins that led to the creation of a second production line.

ABF also reported a strengthening of its sugar division thanks to an increase in world sugar prices and a reduction in EU stock levels, which benefitted its Spanish business.

Chief executive George Weston said it had been a year of progress for ABF, with structural changes at AB Sugar and increased margins in all of its food businesses.

He added: “The diversity of our operations and our broad geographical footprint, combined with a strong balance sheet, equip us well to take advantage of these opportunities as they arise."

The company also announced growth of 3% in its adjusted operating profit to £1.1bn. This was in line with its predictions in its last trading update, released in September.

But these results will not bear fruit in the UK until the end of the next financial year, as its sugar contracts are agreed on an annual basis.

ABF’s profits fell by £30m last year due to a significant weakening of the euro, but a weaker pound following the UK’s decision to leave the EU benefitted it during the third quarter of the year.

Weston said the Brexit referendum had created some short-term uncertainties, adding: “The current level of sterling offers UK food producers significant opportunities to replace imported food and build export markets.”

This month Allied Bakeries unveiled a new Kingsmill loaf that it claims offers consumers the ‘best ever toast’.

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