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Associated British Foods (ABF) has reported a 4% year-on-year revenue growth over the crucial Christmas period due to a recovery of Sugar prices and strong Primark trading.
The group maintained its outlook unchained, expecting progress for the full-year to be reflected in higher adjusted earning per share.
In the 16 weeks to 4 January, Sugar revenues were 7% ahead of the prior year as EU sugar prices recovered from a slump suffered last year. The price boost, combined with a reduction in sugar production costs, is expected to deliver a “material improvement” on ABF’s Sugar profits for the year, the company said.
UK Sugar production is expected to be higher than last year at 1.18m tonnes while Spain’s production will be lower at 210k tonnes, due to a reduction in contracted crop in the north. At Illovo production is expected in line with last year at 1.7m tonnes while in China it will be slightly lower at 130k tonnes.
ABF Grocery sales were flat year-on-year. Twinings growth was driven by sale sof herbal tea in the UK and US, while Ovaltine was held back by a “slow start” in Thailand.
At Allied Bakeries, the operating loss was reduced with progress made from cost reductions, ABF explained.
Agriculture revenues were 10% higher than last year and Ingredients sales soared 3%.
Fast-fashion chain Primark meanwhile, saw sales up 4.5% “almost entirely” due to increased selling space. Operating profit margin however decreased during the period due to a stronger US dollar exchange.
ABF shares were trading 2.5% higher at 2,619p early this morning.
Morning update
C&C (CCR) has announced that CEO Stephen Glancey will retire from the board with immediate effect.
Glancey will be leaving the company at the end of February but will remain available to assist with effecting a smooth handover.
A search for a new CEO will begin shortly, while Stewart Gilliland has been appointed interim executive chairman to “ensure continuity of executive leadership”, the company added.
Furthermore, the company noted that trading for the four months to the end of December 2019 has been “in line with expectations” and it remains “on track” to deliver double-digit earnings per share growth for the full year.
C&C shares opened 0.8% lower at 399.50p.
Sales at Finsbury Food Group (FIF) soared in the six months to the end of December 2019.
The cake, bread and morning goods manufacturer generated total rveenues of £159.4m in the first half, up 4.7% on the prior year, with the increase driven by Finsbury Food’s core division, UK Bakery, up 5.8%.
Overseas sales fell 3.5% against the comparable period a year ago.
“Notwithstanding the group’s continued momentum, management are cognisant of the difficult trading environment and wider macro-economic uncertainty, and remain focused on innovation, efficiency and investment,” the company said.
Finsbury Foods shares opened 4% lower at 95p.
Bakkavor (BAKK) has said it expects revenues for the year ended 28 December 2019 to rise 1.5% year-on-year, with “encouraging progress” made across the group.
In the UK, like-for-like revenues were up 0.2% as low consumer confidence impacted underlying volume growth, the company said.
The International business delivered a 13% like-for-like revenue increase as the business broadened its customer base.
“In the current economic environment, the board considers this to be a solid performance and expects full-year results to be in line with expectations,” Bakkavor said.
Bakkavor shares opened 0.3% lower at 136.80p.
German consumer group and Nivea owner Beiersdorf grew organic sales by 4.1% in 2019, it has announced this morning.
Inheadline terms, sales were up by 5.8%, from €7.23bn to €7.65bn
Its consumer business segment had a “strong” contribution to this result by achieving organic sales growth of 4.8%.
Overall sales in the segment totalled €6.3bn, an increase of 6.5%. In addition to positive exchange rate effects, sales generated by the newly acquired Coppertone brand contributed to the gains in nominal sales, albeit in a limited way due to seasonal effects.
Organic growth was achieved in all regions. Key drivers of the sales growth were the brands Nivea, Eucerin, and Aquaphor as well as La Prairie.
Its Tesa tape business segment achieved organic sales growth of 0.8% in a “challenging market environment”.
Beiersdorf confirmed guidance to generate a consolidated EBIT margin from ongoing operations of around 14.5%.
Chairman Stefan De Loecker commented: “In 2019, we proved our competitiveness in an increasingly challenging market environment that had a particular impact on tesa’s business. We delivered on our C.A.R.E.+ commitment by leveraging growth momentum, gaining market share, and strengthening our brand portfolio.
“Our achievements are the result of the consistent implementation of our C.A.R.E.+ strategy. Even though we expect headwinds in the 2020 financial year, we see good potential and opportunities which we will fully leverage with further investments. With C.A.R.E.+, we are on the right track and are looking forward to the fiscal year ahead with cautious optimism.”
The FTSE 100 opened in the red, falling 0.1% at 7,638.31pts.
Fallers included British American Tobacco (BATS) down 0.7% at 3,481p, Compass Group (CPG) down 0.9% at 1,954.50p and Greggs (GRG) down 0.3% at 2,428p.
Risers saw Sainsbury’s (SBRY) open 0.9% higher at 217p, Coca Cola HBC (CCH) up 1% at 2,775p and Hilton Food Group (HFG) up 1.9% at 1,050p.
Yesterday in the City
The FTSE 100 closed up 0.3% at 7,642.80pts.
Ending in the green, Diageo (DGE) closed 1.2% higher at 3,269p, Unilever (ULVR) up 0.8% at 4,352.50p, Imperial Brands (IMB) up 1.5% at 2,018p and Coca Cola HBC (CCH) up 1.5% at 2,751p.
Tesco (TSCO) closed 0.9% lower at 247.80p after news emerged it might face regulatory threats to the sale of its Asian business.
Also ending the day on a low note, Sainsbury’s (SBRY) fell 2.1% at 215.80p, Morrisons (MRW) was down 0.8% at 190.95p and Marks & Spencer (MKS) down 2.2% at 181p.
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