This time last year, Associated British Foods' (ABF) finance director, John Bason, said he wasn’t concerned about the impact of the end of EU sugar quotas. This appears to have been an optimistic view. During the year to September adjusted operating profit in the sugar business halved to £123m, on sales that fell 15 per cent (at actual exchange rates) to £1.73bn. But while Mr Bason said sugar prices had come down "more and faster" than expected, he's ruled out selling the division.
On a statutory basis, the group reported a 19 per cent decline in pre-tax profit, but strip out the impact of one-off disposals last year, and this figure rose 5 per cent. Profit growth across the group’s other main divisions – retail, grocery, agriculture and ingredients – also helped make up the difference at group level. Sales at Primark increased by 6 per cent to £7.48bn, driven by increased selling space, but fell 2.1 per cent on a like-for-like basis. Mr Bason said new stores in Europe cannibalised sales at existing sites, but argued that those shops had been "overselling" anyway – suggesting that demand remains high.
Analysts at Credit Suisse expect pre-tax profits of £1.36bn in the year to September 2019, giving EPS of 134p, compared with £1.37bn and 135p in FY2018.
| ASSOCIATED BRITISH FOODS (ABF) | ||||
| ORD PRICE: | 2,458p | MARKET VALUE: | £19.5bn | |
| TOUCH: | 2,457-2,459p | 12-MONTH HIGH: | 3,361p | LOW: 2,186p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 1,163p* | NET CASH: | £614 | |
| Year to 15 Sep | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 12.9 | 1.00 | 97 | 34.0 |
| 2015 | 12.8 | 0.71 | 67 | 35.0 |
| 2016 | 13.4 | 1.04 | 103 | 36.8 |
| 2017 | 15.4 | 1.58 | 152 | 41.0 |
| 2018** | 15.6 | 1.28 | 128 | 45.0 |
| % change | +1 | -19 | -16 | +10 |
| Ex-div: | 14 Dec | |||
| Payment: | 11 Jan | |||
| *Includes intangible assets of £1.6bn, or 206p a share **Final dividend includes 11.7p paid on 6 Jul | ||||
