The weakness of sterling has helped Associated British Foods to a 19% increase in revenue in the first three quarters – even as the tough UK market continues to put pressure on margins.
Sales for the group – whose brands include Kingsmill, Ryvita and Silver Spoon – were up 19% for the 40 weeks to 20 June. ABF also cited its exit from US commodity oils and the establishment of its Stratas joint venture as key factors in the rise.
At constant exchange rates group revenue was up 8% as a result of volume growth and price increases. Sales at its Primark clothing business were up 14%.
Sugar sales rose 21% on the back of the acquisition of Iberian producer Azucarera Ebro in April. The agriculture division was up 19% as commodity feed prices fell.
However, volumes at Allied Bakeries were hit by the loss of some own-label and branded business although profits remained ahead in the third quarter as margins increased with further improvement in the baking operations.
Despite strong demand for everyday tea, speciality tea and infusion, volumes fell in the UK. Silver Spoon’s margins were also below last year as the competitive market took its toll, while trading “remained difficult” for Westmill Foods in the UK ethnic wholesale sector.
“Trading for the group since the half-year remains on track to deliver the anticipated progress in operating profit for the second half,” the company said in a statement.
“We still expect little change in earnings for the full year as the increase in operating profit will be broadly offset by a higher interest charge.”