Sweet quarter for ABF

The diversified food, ingredients and retail group whose interests range from beet sugar to affordable fashion, said its sugar revenues were 20% ahead of last year driven by strong performances from British Sugar in the UK and Africa. The UK business, said ABF, had an excellent campaign and benefited from much lower energy costs. Both the UK and Poland had also benefited from the strength of the euro and firmer pricing than expected. In Africa, ABF Illovo’s sugar profit increased in the period but sugar volumes were lower than anticipated. The company said profitability in China would be significantly reduced by weaker sugar prices resulting from over-supply in the domestic market. The company’s agriculture businesses made a strong start to the year with revenue up 26% driven by higher prices, recovering higher input costs, and increased demand for specialist nutrition products. Grocery revenue was 21% ahead driven by the benefits of favourable exchange rates, the flow-through of higher prices and the acquisition of Jordans. Allied Bakeries has continued to trade well with an improvement in profit but the sales of premium teas in the UK and US slowed. Lower consumer demand had also resulted in weaker sales to the foodservice sector, particularly in the US and to ethnic restaurants in the UK. ABF’s ingredients businesses are almost entirely located outside the UK and results benefited significantly from the weakness of sterling against the US dollar and the euro. Trading at the Primark affordable fashion stores subsidiary was strong and over Christmas was ahead of expectations. Sales were 18% ahead of last year. Looking ahead, the group reiterated that it would not be immune from the worsening economic climate and particularly the pressure on consumer spending but still anticipate results in line with its expectations for the full year.