Associated British Foods (ABF) has warned that a damaged UK sugar beet crop could slow growth this year, after reporting group revenue up 10% in the 16 weeks to 8 January.
The company’s interim management statement showed sugar revenues 7% ahead of last year, with higher sugar prices in all regions, which would be used to recover higher wheat costs.
However, ABF warned that while UK sugar beet yields were in line with expectations, the sharp rise in temperature after freezing pre-Christmas weather was affecting the quality of a quarter of crops still to be processed. An trading update will follow on 28 February.
Further increases in Kingsmill volumes and market share drove a good result at Allied Bakeries, it reported, with revenue up 9% in the grocery division. However, price deflation, driven mainly by promotional activity across the market, and increased competition affected the bread businesses.
Selling price increases are planned, or have already been implemented, to recover higher commodity costs, particularly in wheat, corn oil and spices. A company statement said: “Last year saw a step-change in the group’s profitability and, although further growth is expected for the coming year, this will be moderated by the eventual impact of the adverse weather conditions on UK sugar production.”