East Anglia: Sugar business drives profits growth at ABF
ASSOCIATED British Foods said today that its annual operating profits had topped �1billion for the first time, with growth led by strong performances from its sugar business and its budget fashion retail chain Primark.
AB Sugar, which includes UK beet processor British Sugar, saw revenues grow by 25% in the year to September to �2.66billion, with operating profit 62% up at �510million.
And Primark, which has continued to resist Europe’s economic woes, racked up �3.5bn of sales and grew its operating profits by 15% to �356m.
Associated British Foods (ABF) said growth within the sugar business reflected higher sugar production and strong markets in the European Union and Africa, although profit in China was lower due to a weakening of sugar prices during the year.
In the UK, profit from British Sugar was “well ahead of last year”, reflecting an “excellent” campaign, higher sugar production and firmer prices.
“The absence of the weather-related challenges of last year resulted in the production of 1.3m tonnes of sugar compared with just under 1.0m tonnes in 2011,” it added.
Primark’s like-for-like sales were 3% higher, with UK trading “particularly strong” in the summer and Europe still buoyant despite tough economic conditions in three of its markets, in Ireland, Spain and Portugal.
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Nineteen new stores were opened in the year, with a further 12 due to opened by Christmas.
Elsewhere within the group, revenues at the grocery division, which includes brands such as Kingsmill bread, Silver Spoon sugar and Twinings tea, edged 1% higher to �3.72bn but operating profit fell 23% at �187m.
Revenues from ingredients were flat at �1.09bn and operating profit 48% down at �32m and sales in the agriculture division were 12% ahead at �1.27bn and operating profits flat at �40m.
Overall, ABF said group revenues grew by 11% to �12.25bn, with operating profits up 17% at �1.08bn, and pre-tax profits before exceptional items rising by a similar margin to �974m.
Chief executive George Weston said: “These are very good results for the group and include exceptional performances from AB Sugar and Primark.”