Partly Cloudy

Partly Cloudy

max temp: 10°C

min temp: 3°C

ESTD 1874 Search

East Anglia: ABF profits climb as growth at Primark offsets lower revenues for sugar business

10:26 23 April 2014

The British Sugar factory at Bury St Edmunds, part of the sugar business of Associated British Foods.

The British Sugar factory at Bury St Edmunds, part of the sugar business of Associated British Foods.

A fall in sugar prices around the globe has contributed to a 2% decline in first half revenues for Associated British Foods.

shares

But pre-tax profits across the group still rose by 6% in the 24 weeks to March 1, with its budget fashion arm Primark again a star performer.

Group pre-tax profits came in at £434million overall, on turnover of £6.206billion, and at £468m on an adjusted basis, representing underlying growth of 4% compared with last year’s first half.

Operating profits within the group’s sugar division, which includes the British Sugar beet processing business in East Anglia, were sharply down, at £64m against £162m in last year’s first half, on revenues 22% lower at £1.027bn against £1.323bn last time.

ABF said the decline was driven by a combination of substantially lower sugar prices and lower volumes in all markets, with the fall in profits even more pronounced taking into account a £22m charge included in last year’s figures for the mothballing of two factories in China.

In the UK, however, the group said favourable growing conditions through the mild winter had resulted in the crop continuing to grow into the new calendar year, with good beet quality and high sugar content.

“All factories operated very well and sugar production is estimated to be 1.32m tonnes, a record for the period since regime reform in 2006, and compares with last year’s 1.15m tonnes,” it added.

Sales at Primark grew by 14% to £2.3bn, with operating profits 26% higher at £298m, assisted by increased selling space in a number of major cities with the opening of a second store in London’s Oxford Street and extensions to shops in Newcastle and Manchester.

Three new UK stores are due to follow in the second half, including a relocation in Cardiff, and having already opened its first stores in France, in Marseille and Dijon, Primark now plans to make its debut in the United States market with a store due to open in Boston, Massachusetts, towards the end of next year.

Revenues in the group’s agriculture division fell from £641m to £625m and operating profits dipped from £20m to £19m, with lower feed revenues in the UK − largely reflecting a fall in raw material commodity prices − partly offset by growth in China and, South America, Asia Pacific and North America.

Operating profits in the group’s grocery division, which includes Silver Spoon sugar as well as other brands such as Twinings, Ovaltine, Kingsmill, Ryvita and Jordans , rose by 31% from £96m to £126m despite a fall in reported revenue from £1.832bn to £1.767bn.

ABF said that, adjusted for currency movements, grocery revenues were 2% ahead of last year’s first half, with currency factors having little net effect on operating profit.

Twinings and Ovaltine again performed well, with strong sales growth for tea, particularly in the US, Kingsmill bread continued to lead progress for the Allied Bakers business, despite a “highly competitive” UK market, and Jordans and Ryvita also both achieve further growth in sales and market share.

There was a similar picture in the group’s ingredients division, where turnover was 3% lower, at £509m against £527m, at actual exchange rates but 4% up when adjusted for currency movements. Operating profits came in at £15m, against a break-even performance last year.

shares

0 comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

Angela Rushforth, managing director of Ridgeons, with the firm's Investors in People gold accreditation.

Regional timber and builders’ merchant chain Ridgeons has been awarded a “gold” rating under ther Investors in People (IiP) programme.

Alex Till of Menta.

Suffolk-based Enterprise agency Menta and the county branch of the Institute of Directors (IoD) are working together to help Suffolk business owners as they strive for growth.

The water unit from the Prince's Street fire station with Ipswich with officials from the Port of Ipswich and students from Suffolk New College at the water safety demostration hosted by the port.

The Port of Ipswich teamed up with Suffolk Fire and Rescue Service to stage a rescue simulation off Orwell Quay.

From left, Chris Chamberlain from HTK, Vicki Cole from Crafted and Helen Dodman from Ipswich Central, the three organisations behind the Destination Digital conference.

The company behind the delivery of the Ipswich town centre Business Improvement District project has teamed up with two local digital specialist to stage a conference on online marketing for the tourism and hospitality sectors.

French Connection has warned that it faces a substantial loss when it posts its annual results.

Fashion chain French Connection today warned that it now expects to make a big annual loss after seeing its recovery hopes dashed by a difficult spring trading period.

Andrew Harrison, managing director of Stansted Airport.

Manchester Airports Group, parent company of Stansted Airport, scored a four-star rating in Business in the Community’s 2015 CR Index.

Dominic Casserley, group chief executive of Willis.

Global risk advice and insurance broking firm Willis has launched a 550million euro (£393m) offer to take full control of the French broker Gras Savoye.

Sainsbury's is to cut 800 jobs as part of a restructuring of its store operations.

Sainsbury’s is to cut 800 jobs as it becomes the latest supermarket to restructure its operations in the face of tough trading conditions.

The CWind Sword offshore support vessel.

Colchester-based offshore service vessel manufacturer CTruk has won an order to supply two more of its MPC22 boats to sister company CWind.

Kay Allen, founder of Trading for Good, and Paul Winter, chief executive of Ipswich Building Society.

Ipswich Building Society has been presented with a Responsible Business Award at a Trading for Good East of England event held in its home town.

Most read

Most commented

Topic pages