ABF full year profits rise - Company News - Brief Article

Eurofood, Nov 7, 2002

UK food firm Associated British Foods (ABF) has posted a 9% increase in its pre-tax profits for the full year on the back of a cost-cutting programme. For the twelve months to 14 September 2002, ABF reported pre-tax profits, which came in above expectations, of 430m [pounds sterling] (671.4m [euro]) compared to 390m [pounds sterling] for the previous year.

On top of its rationalisation programme, ABF has also been on an acquisition spree, most recently adding the Ovaltine malt drink brand from Swiss pharmaceutical giant Novartis for 171m [pounds sterling].

ABF also splashed out 248m [pounds sterling] on the Mazola cooking oils business from Unilever.

On a smaller scale ABF bought the minority shareholdings in its Australian baking subsidiary George Weston Foods for 58m [pounds sterling].

Group sales for the year increased from 4.4bn [pounds sterling] to 4.5bn [pounds sterling], up 3% compared to last year, while operating profit was up by 13% to 395m [pounds sterling], with its Allied Mills, Allied Bakeries and British Mills subsidiary all turning in strong performances.

However ABF, which make Silver Spoon sugar, Twinings tea, Kingsmill bread and Ryvita crispbread, did see its Polish sugar business struggle due to poor market conditions.

Chief executive Peter Jackson said, "These are strong results and we have again delivered double-digit growth operating profit across four of our five business categories."

The group also operates clothing retailer Primark and British Sugar, which between them generate most of ABF's profits.

The UK firm's acquisition spree could continue, with the firm looking for bolt-on acquisitions in food and food ingredients, particularly abroad.