The Kingsmill bread and Silver Spoon sugar owner said its rise in revenue during the 40 weeks to June 24 was a direct impact of the UK’s Brexit vote last year, which devalued sterling.
An ABF statement said: “The results to date reflect a material translation benefit from the devaluation of sterling following the result of the UK referendum on EU membership in June, last year. At current exchange rates, the translation benefit will be significantly less in the last quarter of our financial year.
‘Expect to report good growth’
“We continue to expect to report good growth in adjusted operating profit and adjusted earnings per share for the group.”
ABF also reported a 13% rise in revenue, at constant currency, during its third quarter. Underlying operating profit was ahead of the group’s expectations, it said. The firm’s Sugar and Ingredients divisions both reported growth across the 40 weeks, while Agriculture was under pressure, ABF said.
AB Sugar’s revenue growth “remained strong” in the third quarter, benefiting from high prices and increased African production. The Illovo sugar brand expected to produce 1.7Mt of sugar this year, compared with 1.4M last year.
Growth remained strong
Yeast and bakery ingredient sales meant the Ingredients division’s year-on-year growth remained strong. ABF confirmed its Finnish enzyme factory had increased capacity by 40% over the quarter.
ABF Agriculture’s third-quarter revenue was slightly ahead of first-half revenue growth, but profit margins were under pressure in the UK and China. The Frontier Agriculture business was held back by low UK grain stocks and little market volatility, ABF said.
Meanwhile, in April, ABF reported a £171M operating profit rise in its half-year trading update. Operating profit increased 36% in the six months to March 4.
ABF trading update – at a glance
- Group revenue up 10% at constant currency over 40 weeks
- Sugar revenue “remained strong”
- Ingredients division boosted by yeast and bakery ingredients sales
- Agriculture under pressure in the UK and China