Strong performance in the Americas, particularly for bakery ingredients, has seen Associated British Foods (ABF) post an operating profit up 25 per cent.
The ingredients division posted revenue of £509 million (€585 million), up from £476 million (€547 million) the year before. This represented an increase in revenue of 7 per cent from the previous year.
ABF said that the better lactose prices in speciality proteins and lower overhead costs benefited the company.
“The investments made in recent years are now delivering very satisfying returns throughout the group,” said George Weston, ABF’s chief executive. “Our sugar business has been transformed, our brands and marketing strategies are driving growth in grocery, the broad geographic base continues to drive momentum in ingredients, and Primark goes from strength to strength.”
The group’s overall revenue increased by 10 per cent to £4,796 million (€5,516 million).
ABF’s yeast and bakery ingredients performed strongly, said the company, particularly in North and Latin America.
Despite commodity costs being generally lower than the previous year, higher local costs for molasses, linked to high global sugar prices, slightly offset the gains.
“The integration of the recently acquired European bakery ingredients business was completed and contributed strongly to the result,” said the company.
The company reports that the Chilean earthquake affected business there, and that rebuilding work to fix damaged buildings was underway. On the bright side, ABF noted that a plant in north east China is set to go on-line before the end of the financial year, and will produce yeast and yeast extracts for the domestic Chinese market, and for export.
Strong performance in the UK and a recovery in China helped ABF to post 39 per cent increased profits from its sugar division. The company also benefited from the sale of its Polish sugar business, which gave then a £33 million (€38 million) profit.
Despite a harsh winter across much of Europe, overall beet yields were up 9 per cent on the previous year to 1.3 million tonnes of sugar, “which was better than expected”, said the company.