Top story
Profits at Associated British Foods have beaten market forecast thanks to margin recovery at Primark and “good growth and strong profitability” in the food division.
Revenues at the group increased 2% to £20.1bn in the 52 weeks to 14 September, with sales at Primark up 5% to £9.4bn and by 1% in the grocery business to £4.2bn.
Adjusted operating profits for the year rose 33% to £2bn, while pre-tax profits were ahead of analyst expectations at £1.9bn, a year-on-year increase of 43%.
CEO George Weston called it a year of ” very strong financial and operational progress” across the group.
He added, alongside the “good sales growth” and “significant” recovery in margin at Primark, ABF had benefitted from easing in input cost in the food business.
Weston said the grocery arm also saw increased investment in marketing, strong commercial execution and good product innovation during the period.
Adjusted operating profit margin for the grocery segment improved to 12.1% overall, driving significant growth in adjusted operating profit, up 14% to £511m.
The margin improvement reflected the falling inflation, a strong performance in the US-focused businesses and much-reduced losses in Allied Bakeries, partially offset by higher marketing investment.
The ingredients division recorded a 1% fall in revenues to £2.1bn, while sugar increased sales 2% to £2.5bn.
“Looking ahead, the group is well-positioned,” Weston said.
Separately, ABF announced a final dividend for the year of 42.3p a share and also a special dividend of 27p a share.
Shares in the group increased 2% so far this morning to 2,334.7p.
Morning update
Losses at embattled spirits group Distil have grown as volumes disappeared in the first half.
The owner of RedLeg, Blackwoods and Blavod brands, saw revenues slump by 42% to £393k in the six months to 30 September, with volumes down 42% year on year.
Pre-tax losses expanded from £314k a year ago to £555k. Executive chairman Don Goulding said it had been a “challenging” period for the business and consumers cut back on spending both in and out-of-home.
The business also suffered from a stock hangover in the trade following a slower-than-expected Christmas.
However, Distil reported improving trends in the second quarter of the first half, which saw a 0.3% rise in volumes year on year and an increase of 88% on Q1.
“The market is showing early signs of improved consumer confidence with the full-year outlook more positive, but we remain cautious, and cash management will be a focus area for the business, ensuring to prioritise higher ROI spend,” Goulding added.
In September, Distil secured emergency funding to help it survive through the important golden quarter.
Hilton Food Group has reported a third quarter in line with expectations as the “strong” performance from the first half continued across all three geographical operating regions.
The trading update said the seafood business was performing in line with expectations and, within the UK & Ireland, the group continued to grow core meat volumes and revenues.
Hilton maintained its guidance for the full year.
CEO Steve Murrells added: “This has been a further period of progress for Hilton Foods. The strength of our quality products has continued to underpin our customer relationships as we target further international growth.”
Sales at Coca-Cola Europacific Partners have been held back by disappointing weather across Europe and the UK.
Revenues in the third quarter increased 2.4% to €5.4bn, with volumes flat overall and down 1.4% in Europe.
However, the downturn was offset by a summer of sport with the Euro 2024 football tournament and the Paris Olympics helping the group.
CEO Damian Gammell said 2024 continued to be “a solid year” for the group.
“We are well placed for 2025 and beyond. We continue to invest for the long-term and are confident that we have the right strategy, done sustainably, to deliver on our mid-term growth objectives.”
Retailers have registered “disappointing” sales in October as worries in the run up to the Budget sppoked consumers, according to the latest data from the BRC and KPMG.
UK total retail sales rose by 0.6% year on year last month, compared with growth of 2.6% in the same month in 2023.
Food sales increased 2.9% year on year over the three months to October, a big slowdown on the 7.9% inflation-driven boost a year earlier, the BRC-KPMG retail sales monitor revealed.
BRC chief executive Helen Dickinson said that half-term falling a week later this year affected comparisons but added that speculation ahead of the Budget hadn’t helped.
“After a painful Budget for retailers, the hope is it will be less painful for households in the immediate term and consumer appetite will pick up in time for the Black Friday sales and festive season,” she added.
Spending in supermarkets fell by 0.8% year on year in October as food price inflation continued to ease, according to the latest report from Barclays.
Essential spending saw its greatest fall (-2.2%) since April 2020, while Brits also cut back on takeaways and fast food to save money, with spending down from 0.8% growth in September to flat in October.
“With price pressures continuing to ease and tentative signs that consumer confidence is improving once again, following what appears to have been a post-election dip, we think that the stage is set for real spend growth, as we move through the final quarter of the year, and look ahead to 2025,” said Jack Meaning, chief UK economist at Barclays.
No comments yet