ABF’s group revenue for the 16 weeks to January 2 was 3% ahead of the same period last year at constant currency and 2% behind at actual exchange rates.
The food and clothing giant said that continuing low bread prices had proved challenging for ABF’s subsidiary Allied Bakeries, which makes Kingsmill, Allinson, Burgen and Sunblest brands.
“Allied Bakeries achieved a substantial increase in sales volumes although pricing and margins remain challenging,” said its trading update published today (January 14).
ABF subsidiary British Sugar
View from ABF
“The underlying trading outlook for the group is unchanged.”
- Trading update, ABF
Another ABF subsidiary British Sugar, which is part of the AB Sugar group, is a leading supplier and the sole producer of sugar from the UK’s sugar beet crop.
The company said the crop for the 2015/16 season crop had made “good progress” and operating performance remained strong across all its sites.
“After the record crop of 1.45Mt last year, a smaller area was contracted for cultivation this year,” the trading update said. “With a return to more typical beet yields, this will see sugar production just short of 1Mt.”
‘Profit progress’ for ingredients
ABF said its grocery division has made margin progress and its ingredients division has made profit progress this year, following strong performances from AB Mauri and its speciality ingredients businesses last year.
Across the group, ABF warned that currency pressures were expected to lead to a modest decline in adjusted operating profit for the group for the full financial year.
“The underlying trading outlook for the group is unchanged,” the company said.
“Investment in expansion opportunities will continue, most notably for Primark, and there is increasing evidence that our expectation of stability in sugar profit ahead of EU quota removal in 2017 will be realised.”
ABF results at a glance
- Group revenue was 3% ahead of the same period last year at constant currency
- But group revenue was 2% behind at actual exchange rates
- Trading outlook for the group is unchanged