ABF reports strong growth at half year

ABF announced a 20% rise in its half year pre-tax profits to £331 million and 10% growth in group revenues to £4.8 billion. The group said its extensive capital investment over recent years was now beginning to pay dividends with the return on average capital employed improving from 14% in the first half last year to almost 16% this year, despite a large number of investment projects still in progress. As had been expected, profit from the sugar business was substantially ahead of last year, due to both a strong performance from the UK and recovery in domestic sugar prices in China. Trading at the company's high street fashion stores, Primark, achieved an 8% growth in sales despite recessionary pressure and an 18% increase in profits to £144 million. The fashion retailer contended with adverse exchange rates increasing its cost of imports, particularly goods sourced in US dollars. Elsewhere in the group, the agricultural division saw the pig and poultry feed business benefiting from sterling weakness while operating profit from the grocery division, which includes Allied Bakeries and the Best Factory award winning tea brand Twinings, soared 53% to £95 million. ABF chief executive George Weston (pictured) said: "The investments made in recent years are now delivering very satisfying returns throughout the group. Our sugar business has been transformed, our brands and marketing strategies are driving growth in grocery, the broad geographic base continues to drive momentum in ingredients, and Primark goes from strength to strength."