Associated British Foods has said that trading remains broadly in line with its expectations at the start of its financial year.

The company, which makes Twinings tea and Silver Spoon sugar, said its British Sugar business has progressed well with a crop forecast at over 1.4m tonnes and extraction rates at record levels. Combined with prices which have benefited from a strengthening of the euro, this has more than offset the effect of a 40,300 tonne temporary quota cut and lower world sugar prices.

Since last financial year the group has completed the acquisition of Ovaltine and the minority shareholding in George Weston Foods in Australia for £232m.

Trading at George Weston Foods in Australia has been encouraging and progress has been made in reducing overheads.

Following the completion of the acquisition of Ovaltine in December, the integration of the business is progressing satisfactorily.

Proceeds from the disposal of Allied Glass Containers, the third party flour milling business in Britain and the rice specialities business in the U.S. are estimated at £118m.