Primark bounce helps offset sugar slump at ABF
Ingredients group Associated British Food posted a slight rise in profit for the last 12 months, as a strong showing in fashion arm Primark offset a sharp slowdown in its embattled sugar business.
Shares in the FTSE 100 group climbed four per cent to 2,329p in early morning trading.
The figures
Adjusted operating profit hit £1.42bn in the year to 14 September 2019, rising one per cent on the previous year.
Group revenue climbed two per cent to £15.8bn.
The firm’s grocery and Primark divisions delivered profit rises of 14 and eight per cent respectively, helping to weather continued underperformance in the sugar business.
Sales at Primark were 4.1 per cent ahead of last year at constant currency, driven by increased selling space that was partially offset by a two per cent decline in like-for-like sales.
Like-for-like sales in Primark’s UK market fell by one per cent but the firm said it “outperformed a weak total clothing, footwear and accessories market which includes online”.
Grocery sales were bolstered by demand for tea brand Twinings, which benefited from the success of Cold Infuse teas in their launch markets of the UK and Australia.
Profit at AB Sugar crashed 78 per cent to £26m at constant currency, with the company blaming lower EU sugar prices and a poor crop in China.
Revenue in the sugar business tumbled five per cent to £1.61bn.
However, in its outlook for the year ahead, ABF said that AB Sugar “will benefit materially from the increase seen this year in EU sugar prices and from further cost reduction.”
What the boss said
George Weston, boss of ABF, said: “The group delivered a resilient performance this year, with strong profit growth from Grocery and Primark which more than offset the profit decline in Sugar.”
He added: “We continued to pursue the opportunities to grow our businesses with a gross investment of over £800m. Next year the group is well-positioned for further progress, with the continued expansion of Primark, a material improvement in our Sugar profit and strong profit growth in Grocery.”