ABF said that it had made moves in cost reduction and pricing action had been taken but there was a lag in recovery of cost inflation.
In its interim results for 24 weeks ended 5 March 2022 it cited high input cost inflation, logistics challenges and Covid-related labour absences as being major challenges for the business. However, it said that sugar sales were doing well and profit was well ahead –ood sales were up 6% to £4,342m while adjusted operating profit down 9% to £330M.
Sugar and ingredients
In February, ABF said its sugar and ingredients divisions have delivered powerful performances in the 24 weeks to 5 March 2022, while Twinings Ovaltine proved a star performer in its grocery channel.
The company that also owns the Primark clothing chain said there had been a strong sales recovery in UK and Ireland with increased holiday travel and socialising. But inflationary pressures would mean the fashion chain would be implementing selective price increased on winter/autumn stock.
“This half year sales and operating profit for the Group returned to pre-COVID levels. Our people have responded well to the many challenges we faced,” said George Weston, chief executive of ABF.
“Our food businesses have once again proved their operational resilience and Sugar had another strong period, building on its recent track record of recovery. Measures to mitigate higher costs in all our businesses have been taken and more are planned.”
In January, ABF said that total food sales were up 5% to £2.9bn year-on-year for the 16 weeks to 8 January. It said ingredients were 10% ahead of last year, fuelled by volume recoveries in a number of speciality businesses.
The company previously revealed it was managing to offset what it describes as'an escalation' in utility, supply and raw material costs through cost efficiencies and price recovery.