Higher EU sugar prices, lower UK sugar beet costs and an increase in sales volumes at sugar producer Illovo saw revenues at Associated British Foods’ (ABF) AB Sugar division increase by more than a fifth at constant currency over the past year to £2.2bn, with adjusted operating profit up 374 per cent to £223m. What's more, finance director John Bason isn't concerned about the recent lift on sugar quotas in the EU, or the looming UK sugar tax due in April next year because he believes sugar will remain an essential part of western diets.
Mr Bason isn't concerned about a possible contraction in the UK retail market either. Over the year, sales at clothing chain Primark rose 12 per cent at constant currency to £7.1bn, while profits increased 3 per cent to £735m. A reluctance to pass on foreign exchange-driven cost pressures to the customer meant adjusted operating profit margins contracted from 11.6 per cent to 10.4 per cent. But Mr Bason insisted that the company wouldn't consider price increases at this stage, having actually made cuts during the year.
Analysts at Credit Suisse expect pre-tax profits of £1.4bn in the year to September 2018, giving adjusted EPS of 134p, compared with £1.3bn and 127p in FY2017.
| ASSOCIATED BRITISH FOODS (ABF) | ||||
| ORD PRICE: | 3,220p | MARKET VALUE: | £25.5bn | |
| TOUCH: | 3,219-3,220p | 12-MONTH HIGH: | 3,387p | LOW: 2,335p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 1,053p | NET CASH: | £673m | |
| Year to 16 Sept | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 13.3 | 0.90 | 74.0 | 32.0 |
| 2014 | 12.9 | 1.00 | 96.5 | 34.0 |
| 2015 | 12.8 | 0.71 | 66.8 | 35.0 |
| 2016* | 13.4 | 1.04 | 103 | 36.8 |
| 2017 | 15.4 | 1.58 | 152 | 41.0 |
| % change | +15 | +51 | +47 | +12 |
| Ex-div: | 14 Dec | |||
| Payment: | 12 Jan | |||
| *53 week period | ||||
