Partly Cloudy

Partly Cloudy

max temp: 15°C

min temp: 10°C

ESTD 1874 Search

East Anglia: British Sugar and Silver Spoon owner ABF issues warning over fall in world prices

09:00 16 January 2014

The British Sugar factory in Bury St Edmunds.

The British Sugar factory in Bury St Edmunds.

Silver Spoon owner Associated British Foods (ABF) today reported a “weaker than expected” performance within its sugar division, but said the current beet campaign in the UK was progressing to plan.

shares

ABF said sugar revenues during its opening quarter, covering the 16 weeks to January 4, were 27% below the corresponding period a year ago, adjusted for currenncy movements,

Besides lower prices within the European Union, which the group had already warned would lead to lower revenues and margins for both its British Sugar business in the UK and its operations in Spain, recent falls in world prices may put further pressure on revenues and margins elsewhere, particularly in China.

Sales volumes in Africa and China were both lower then last year and reduced sugar production in Spain had led to the elimination of non-quota exports this year.

“The UK campaign is progressing to plan. Beet quality and sugar content are encouraging and all factories are operating well.” ABF said. “Sugar production for the current year is now estimated to be 1.28m tonnes compared with last year’s 1.15m tonnes.”

However, it added: “Lower sugar prices, as the market rapidly adjusts ahead of EU regime reform in 2017, will result, as previously indicated, in a substantial reduction in profit from our sugar businesses this year. With the further recent fall in world sugar prices this reduction will now be greater than previously expected.”

Revenues with the group’s agriculture division were flast compared with last year, with lower UK feed volumes offset by growth in China, South America and Asia.

Revenues within the group’s grocery division, which includes brands such as Silver Spoon, Twinings and Ovaltine, were 1% down in total but 2% ahead of last year when adjusted for currency movements,

ABF said sales at Silver Spoon had declined as a result of lost contracts and reduced UK sugar pricing but the profit impact has been partially mitigated by overhead cost reduction.

The pattern was similar in the ingredients division, with revenue 2% lower at actual rates but 3% ahead of last year on a constant currency basis.

However, ABF’s star performance was again its Primark discount clothing chain, where sales were 12% ahead at constant currency rates and 14% up in total.

The group the growth was driven by an 8% increase in selling space, strong like-for-like growth and higher sales densities from new stores.

“Although like-for-like sales in the first eight weeks were held back by the unseasonably warm weather and the strong comparatives in the previous year, the second half of the period was characterised by excellent Christmas trading with very strong like-for-like growth,” it said.

Overall, ABF said group revenue for the first quarter were 1% on a constant currency basis and flat compared with last year at actual rates, and the group said its profits expectations for the full year remained unchanged.

Related articles

shares

0 comments

Sizewell A and B

Staff at the redundant Sizewell A nuclear power station will have to wait to find out if their jobs are safe from planned redundancies.

The opening of Precision Marketing's new headquarters in Bury St Edmunds.

An expanding marketing services firm celebrated the official opening of its new head office in Bury St Edmunds yesterday.

Arlingtons new art exhibition, Liz and Ken Ambler at the launch

Music, art, wine and a great deal more

Abby Curtis who is opening Pump and Grind coffee shop in Great Colman Street with Tom Kerridge

The business team behind a new cafe have said they are disappointed they will not able to serve alcohol when opening for the first time on Saturday.

Steven and Debbie Morgan pictured when they took over The Royal Oak earlier this year

Firefighters were called to a pub last night following a water leak which caused flooding.

Rachel Pearlman, Zoe Bradbury, Jack Northcott and Jordan Keeble of Ginger Nut Media team  at the OXO Tower in London, after being awarded as the best level of support during Advanced Apprenticeships.

A digital advertising firm is celebrating after scooping an award for its supportive training regime.

Royal Mail has seen a rise in annual profits.

Royal Mail today reported a rise in underlying annual profits as a squeeze on costs helped offset a lower than expected performance from its parcel business.

Bury Council Building Angel Hill.

The new chairman of Bury Town Council has said he intends to make the authority relevant after claiming it has done “almost nothing” for the last few years.

Tesco  Group Chief Executive Dave Lewis

Tesco paid £4.1 million to new boss Dave Lewis in his first six months after he was brought in from consumer goods group Unilever to turn around the embattled supermarket.

A branch of cash and carry chain Booker

The country’s largest cash and carry chain is to buy Londis and Budgens in a £40million deal to boost its scale amid the ongoing supermarket price war.

Most read

Most commented

Topic pages