ABF has played down the significance of Tesco’s recent delisting of its Kingsmill bread brand.

FD John Bason said the Allied Bakeries subsidiary had already replaced the lost business. “It won’t surprise you that the business we have picked up has more than compensated for the delisting,” he added.

“Of course we’re disappointed with the loss of Kingsmill, but Tesco were less than 5% of our Kingsmill volumes. We are still stocked in Northern Ireland and Allied Bakeries continue to own-label loaves and supply bakery snacks and we’ll also work with Tesco to look at a return in the future.”

The delisting came just a few weeks after Kingsmill owner Allied revealed CEO Mark Fairweather had stepped down. Bason said a successor would be announced soon but he paid tribute to Fairweather’s contribution. “Mark has overseen for a number of years a major reinvestment and a complete change in the cost position of Allied. All credit to his leadership for what has been achieved there.”

Overall profits at ABF slumped 51% to £231m this week as its sugar business went £3m into the red in the 24 weeks to 28 February, due to plummeting EU sugar prices. Only a year ago the division recorded a profit of £64m. It was also hit by currency swings.

However, earnings grew in all other divisions, including grocery, which also achieved further margin improvement despite the difficult market conditions.

Half of grocery’s profits come from the Twinings Ovaltine business, with record market share achieved in the first half in the UK and Australia coupled with “very strong” growth in the developing markets of China and India.

“It’s our one truly international business and its success is down to its appeal to a broad number of people as an affordable, everyday luxury,” Bason said.

Grocery increased profits despite the top line slipping back 4% to £1.6bn, which Bason blamed on food commodity price deflation rather than supermarket price war pressures. “It’s looking as though most food commodities could even go lower. We’ve seen that certainly with sugar.”

Dorset Cereals, acquired in October, was also trading well, with its integration with Jordans Ryvita on track and performing ahead of the business plan. Bason confirmed ABF was in the mood for further deals and was eyeing businesses with growth potential.

“You have to recognise the growth profiles,” he said. “We’re not looking to turn tired brands around.”

CEO George Weston called it a “sound trading result”, with significant progress made in operating profit by Primark, agriculture and ingredients