Partly Cloudy

Partly Cloudy

max temp: 22°C

min temp: 17°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

The head office of BT, the BT Centre, in Newgate Street, central London.

Thousands of BT workers are to share in a £265million payout under share-related savings schemes which will see some employees making gains of more than £54,000.

A plane in Flybe's latest purple livery.

Regional airline Flybe has confirmed its 2015-16 winter schedule to and from Stansted.

A computer-generated image of how the Sizewell complex will look after construction of Sizewell C.

Development of Sizewell C took a huge step forward today as the companies were announced that will build its sister nuclear power station in Somerset.

Lloyds has added £1.4billion to its bill for compensating customers mis-sold payment protection insurance.

State-backed Lloyds Banking Group’s provision for payment protection insurance mis-selling has topped £13billion after it yesterday took another £1.4billion hit over the scandal.

Gary Allen, operations manager,  with Diane Allen and Graham Allen at Ipswich-based Ajax Domestic Spares which is celebratiing 40 years in business.

Ajax Domestic Spares has marked 40 years in business in style by launching a new showroom in Foxhall Road, Ipswich.

The Great House restaurant with rooms in Lavenham.

An award-winning Suffolk restaurant has gained another accolade after being ranked the 26th best in the country.

Gavin Patterson, chief executive of BT.

Photo: BT

BT is to pay out up to £129million to extend the Government-led roll-out of superfast broadband, after a bigger-than-expected take-up of the service.

Centrica has reignited controversy over high energy bills by announcing a 44% increase in first half profits at its British Gas retail division.

Energy giants Royal Dutch Shell and Centrica today revealed plans to axe a total of more than 12,000 jobs.

The Willis building in Ipswich.

Around 200 people are to lose their jobs at the Ipswich office of global insurance broker and risk management group Willis.

Christopher Hayman of Hayman Distillers with his children Miranda and James.

Essex gin maker Hayman Distillers is celebrating after winning a Gold award at this year’s International Wine and Spirits Competition (IWSC).

Most read

Most commented

Topic pages