Sugar's turning sour for ABF

Primark, which generated 44 per cent of group operating profit last year, is also set for a busy schedule of international store openings this year as expansion picks up. Agriculture was another star division. Profit here grew 18 per cent to £47m, as demand for animal feed increased. But sugar, which accounted for 37 per cent of group profit, had a difficult year. Lower yields in Europe, higher beet costs in the UK, and difficulties in China resulted in flat sales and a 15 per cent profit slide. Management expects further declines too, ahead of the abolition of European Union sugar quotas in 2017.

There was, though, a marked improvement in the grocery business, where profit jumped 24 per cent, thanks partly to lower restructuring charges, but also strong trading at Twinings Ovaltine and Allied Bakeries, the home of Kingsmill bread. Meanwhile, the steep profit fall in the ingredients category reflected exceptional costs, rather than a deterioration in underlying trading. Strip these items out and profits here would been flat at £27m on sales of £1.1bn.

Numis Securities expects flat adjusted pre-tax profit of £1.09bn in 2014, giving EPS of 98p.