ABF Reports Strong Growth in Ingredients
Ingredients achieved a revenue increase of 18% over last year to £406m. This growth was largely driven by the yeast business which benefited from a combination of organic growth in all regions and the acquisition of the Gilde business in Italy.
22/04/08 Associated British Foods plc (ABF) has announced its interim report for the 24 weeks ended 1 March 2008. Earnings growth of 8% and further substantial investment at ABF. Group revenue was up 15% to £3,706m. Adjusted operating profit up 9% to £296m, while adjusted profit before tax up 5% to £282m. Operating profit up 17% to £281m, profit before tax up 35% to £267m and basic earnings per share up 33% to 25.6p.
George Weston, Chief Executive of Associated British Foods, said: “These good results demonstrate that the group remains on track with strong growth from Grocery, Ingredients and Agriculture and another excellent performance from Primark. The development of our businesses continued apace, most notably with further substantial investment in Sugar and expansion at Primark.”
Ingredients achieved a revenue increase of 18% over last year to £406m. This growth was largely driven by the yeast business which benefited from a combination of organic growth in all regions and the acquisition of the Gilde business in Italy. Profit was up 6% to £35m with lower prices for lactose, a protein co-product, adversely impacting margin.
Very good progress was made in ABF’s yeast and bakery ingredients business, AB Mauri. There was further recovery in North America, a substantial improvement in Brazil, which benefited from lower operating and molasses costs, and growth in the China and Pacific region. Signficant investments include expansion of the Argentinian plant, which has created one of our lowest cost plants, further additional capacity being added in north east China and a yeast and bakery ingredients plant has been completed in Mexico. The newly acquired plant in Italy is now our largest. Competition clearance on the acquisition of some of the remaining European assets of Gilde Bakery Ingredients is awaited.
At ABF Ingredients, growth in enzymes was achieved by an increase in sales resource, with a wider geographical reach, and the introduction of new products. However, the protein business was adversely affected by much lower prices for the co-product lactose. Increased demand has led to further investment in additional enzyme capacity in Finland and the building of a new yeast extract plant alongside our yeast facility in north east China. ABF sold its small UK-based emulsifier business at the beginning of February with completion being subject to competition clearance.
