Associated British Foods (ABF) has experienced revenue growth in its Grocery, Sugar and Ingredients divisions. It is due to release its first-half trading report on April 19 in which it expects to report what it terms as an “excellent performance.”
It released a statement which in part read: “For the half year, we expect excellent progress in adjusted operating profit and adjusted earnings per share for the group. The trading outlook for the group for the full year is unchanged”.
It added: “Acquisitions in the year to date amount to £60M and with the benefit of net proceeds of £0.5bn from the sale of the US herbs and spices business and the south China cane sugar operations, we expect a net cash balance of some £200M at the half year.”
The publishing of the group’s half-year update is scheduled for April 19.
According to analysts’ prediction, the group will report total revenues to the tune of £15.4bn, and improvements in operating profit as well as earnings per share in its interim results to March 4, 2017. Besides, it expected stronger cash flow as well as a higher capital expenditure.
The operating profit of ABF’s Grocery division was expected to grow not only at constant currency but at actual exchange rates as well. According to ABF, the profit boost will be driven by Twinings Ovaltine, Allied Bakeries as well as international sales.
Twinings Ovaltine were said to be “well ahead of last year.” They actually benefitted from the inconsistent exchange rates with 80% of sales originating from overseas. The company attained share gains in the United Kingdom as well as the U.S., Australia and France.
Allied Bakeries sales increased following Kingsmill re-branding of packaging that was reportedly “well received by customers and consumers” alike. In addition to the UK, Jordans and Dorest will also report growth in Australia, Belgium, France and the Netherlands.
The ABF’s sugar division expected “substantial increase in profit” as a result of higher sugar prices coupled with increased production in Africa.
British Sugar’s operating profit will significantly improve over ABS’s initial six months – thanks to lower sugar beet costs, coupled with the weaker pound. ABF said that in spite of poor crop yield in 2016 following abnormally high temperatures plus drought, the African sugar producer Illovo made good progress.
ABF claimed that the ingredients division comprising of yeast and bakery ingredient manufacturing had superb six months. European trading was as per the expectations and revenue was actually estimated to surpass last year at constant currency.
In the meantime, City analyst Shore was reportedly “very encouraged” by the group’s progress.