TIDMABF
RNS Number : 5187A
Associated British Foods PLC
23 January 2024
23 January 2024
Trading Update
Associated British Foods plc today issues its trading update for
the 16 weeks to 6 January 2024 summarising the significant trading
developments since the last market update.
Group revenue
The following table sets out revenues by business segment for
the period.
First Quarter / 16 weeks Change at Change at
to 6 Jan actual constant
GBPm currency currency
============ ======================== ========= =========
Grocery 1,414 +1.8% +5.4%
Ingredients 698 -2.8% +0.9%
Agriculture 572 -12.1% -10.8%
Sugar 825 +3.8% +13.0%
Retail 3,376 +7.3% +7.9%
Group 6,885 +2.8% +5.4%
============ ======================== ========= =========
References to growth in the following commentary are based on
constant currency except where stated.
Trading performance
Our Grocery business performed well. Our US-focused brands,
including our Stratas joint venture in edible oils, continued their
strong performances from last year. Within international brands,
Twinings traded well across its key markets. Ovaltine had a strong
performance in Western Europe but was weaker overall as it
continued to face challenges in Asia.
In Ingredients, our yeast and bakery ingredients business AB
Mauri also maintained the strong performance of last year with
further growth in sales and profit. As expected, parts of ABF
Ingredients were softer due to continued customer destocking. In
Agriculture, sales were weaker although certain of the compound
feed markets are beginning to show signs of recovery.
In Sugar, processing of the UK sugar beet crop is under way and
indications to date are that sugar production will still be
significantly above last year despite the recent weather. This
should bring production more broadly into line with historical
production levels. Vivergo had a mixed period of trading but was
overall much better than last year. Illovo, our sugar business in
southern Africa, also had a mixed period with a combination of
production and currency challenges.
Primark trading was good overall with sales up 7.9% for the
period which was marked by a slow start given the unseasonal warm
weather, and strong Christmas trading. Like-for-like sales grew by
2.1% driven by higher average selling prices.
Our product offer performed well in the period. Sales of
womenswear and menswear were strong particularly in performance
wear, leisure and tailored clothing and in our Rita Ora collection.
Sales of our Christmas ranges were also strong and sold through
well. At the start of the period sales of many of our cold weather
categories were initially slower but have much improved with the
recent cold temperatures.
In the UK, total sales in the period rose by 4.5% with
like-for-like sales up by 3.8%. Following the period's early warm
weather challenges, sales grew strongly in the run-up to Christmas.
Primark's market share(1) reached a new record at 7.1% for the 12
weeks to 10 December, up 0.1 percentage point from last year.
In Europe excluding the UK, total sales in the period rose by
8.1%, with like-for-like sales up by 1.3%. Performance was mixed
with some countries trading well and other countries impacted by a
combination of strong comparatives in the same period last year and
local economic conditions. Sales in the US grew by 45% in the
period driven by new store openings.
We exited the period with stock levels in a good position. We
continue to monitor the situation in the Red Sea but at this stage
we do not expect any significant disruption to our supply
chain.
Contribution from our new store opening programme remains very
strong as our store expansion programme continues with eight stores
opened in the period: three in France, three in the US, one in
Spain, and one in Poland.
Overall
The Group continues to trade well. We continue to look forward
to a year of meaningful progress in both profitability and cash
generation, with the profitability improvement being driven by a
recovery in Primark margin, a marked improvement in British Sugar
profitability, and by reduced losses at Vivergo.
At this early stage in the year we now feel more confident in
the continued strong performance of both our US-focused brands in
Grocery and of AB Mauri in Ingredients.
We also feel more confident in the delivery of the Primark
adjusted operating margin in this financial year, driven by a
further improvement in product gross margin. This should insulate
us well against potential additional costs of supply due to the
disruption in the Red Sea should they arise.
1. Kantar, Primark market share of the total UK clothing,
footwear and accessories market including online by value, 12-week
data to 10 December 2023
For further information please contact:
Associated British Foods:
+44 20 7399 6545
Eoin Tonge, Finance Director
Chris Barrie, Corporate Affairs Director
Citigate Dewe Rogerson:
+44 20 7638 9571
Jos Bieneman +44 7834 336 650
Angharad Couch +44 7507 643 004
An investor and analyst call will be held at 08:30 today,
Tuesday 23 January 2024. All participants must pre-register to join
this conference using the Participant Registration link below. Once
registered, an email
will be sent with your unique Registrant ID. Please register via participant registration link
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END
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January 23, 2024 02:00 ET (07:00 GMT)
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