TIDMABF
RNS Number : 2815J
Associated British Foods PLC
26 April 2022
For release 26 APRIL 2022
Interim Results Announcement
24 weeks ended 5 March 2022
For release 26 APRIL 2022
Associated British Foods plc results for the 24 weeks ended 5
March 2022
Group sales and profit return to pre-COVID levels
Financial Headlines
Constant
Actual currency currency
change change
===================================== ========= =============== =========
Group revenue GBP7,882m +25% +28%
Adjusted operating profit GBP706m +91% +92%
Adjusted profit before tax GBP666m +109%
Adjusted earnings per share 63.8p +154%
Dividend per share 13.8p +123%
Gross investment GBP450m
Net cash before lease liabilities GBP1,476m
Net debt including lease liabilities GBP1,665m
Statutory operating profit GBP686m +114%
Statutory profit before tax GBP635m +131%
Basic earnings per share 60.3p +194%
===================================== ========= =============== =========
Statutory operating profit is stated after exceptional charges
and other items shown on the face of the condensed consolidated
income statement. There was a GBP25m exceptional charge in the
prior half year.
Food: resilient operational performance
Sales up 6% to GBP4,342m; adjusted operating
-- profit down 9% to GBP330m
-- Cost reduction and pricing action taken
but lag in recovery of cost inflation
-- High input cost inflation, logistics challenges,
COVID-related labour absences
-- Sugar sales and profit well ahead
Primark: strong recovery in sales and margin
-- Sales up 59% to GBP3,540m; adjusted operating
profit margin 11.7%
-- UK/Ireland: strong sales recovery with
increased holiday travel and socialising
-- Continental Europe: consumer footfall remained
weak
-- US: trading well
-- Transforming digital capability; launch
of new website
Dividend
Interim dividend of 13.8p per share (2021:
-- 6.2p)
George Weston, Chief Executive of Associated British Foods,
said:
"This half year sales and operating profit for the Group
returned to pre-COVID levels. Our people have responded well to the
many challenges we faced.
Our food businesses have once again proved their operational
resilience and Sugar had another strong period, building on its
recent track record of recovery. Measures to mitigate higher costs
in all our businesses have been taken and more are planned. Primark
delivered a significant increase in sales and profit, with stores
now open and trading largely free of restrictions.
Looking further ahead, inflationary pressures are such that we
are unable to offset them all with cost savings, and so Primark
will implement selective price increases across some of the
autumn/winter stock. However, we are committed to ensuring our
price leadership and everyday affordability, especially in this
environment of greater economic uncertainty.
Notwithstanding the inflationary pressures we are experiencing,
our outlook for the year is for significant progress in adjusted
operating profit and adjusted earnings per share for the
Group."
The Group has defined and outlined the purpose of its
Alternative performance measures in note 13. These measures are
used within the Financial Headlines and in this Interim Results
Announcement.
For further information please contact:
Associated British Foods:
Tel: 020 7399 6545
John Bason, Finance Director
Chris Barrie, Corporate Affairs Director
Citigate Dewe Rogerson:
Tel: 020 7638 9571
Jos Bieneman Tel: 07834 336650
There will be an analyst and investor presentation at 09.00am
GMT today which will be streamed online and accessed via our
website here.
Notes to editors
Associated British Foods is a diversified international food,
ingredients and retail group with annual sales of GBP13.9bn and
128,000 employees in 53 countries. It has significant businesses in
Europe, Africa, the Americas, Asia and Australia.
Our aim is to achieve strong, sustainable leadership positions
in markets that offer potential for long-term profitable growth. We
look to achieve this through a combination of growth of existing
businesses, acquisition of complementary new businesses and
achievement of high levels of operating efficiency.
For release 26 APRIL 2022
Interim Results Announcement
For the 24 weeks ended 5 March 2022
Chairman's statement
This half year sales and adjusted operating profit for the Group
returned to the pre-COVID levels reached in the half year to 29
February 2020. This has been led by a strong recovery in sales and
operating profit margin at Primark where trading was much improved
following the relaxing of most government restrictions on store
operations. All our businesses are experiencing logistics
challenges, COVID-related labour absences and significant
inflationary pressures in raw materials, supply chains and energy.
At the end of the period these inflationary pressures increased
further with the Russian invasion of Ukraine. Given this backdrop,
our food businesses delivered a resilient operational
performance.
Our people have faced challenges on so many fronts; I would like
to recognise their perseverance and commitment and I thank them for
it.
Revenue for the Group of GBP7.9bn was 25% ahead of last year at
actual exchange rates and adjusted operating profit of GBP706m was
91% ahead.
The net of Finance and Other financial income and expense
improved by GBP10m and so adjusted profit before tax was 109% ahead
of last year. The stronger profitability of Primark, and the
consequent change in the weight of profit by tax jurisdiction for
the Group, has resulted in a return of the Group's effective tax
rate to closer to pre-COVID levels at 23.2% from 34.9% last half
year. Adjusted earnings per share increased by 154% to 63.8p.
The statutory operating profit for the period of GBP686m
increased by 114%. This reflects the improvement in adjusted
operating profit and there was a GBP25m exceptional charge in the
prior half year.
We have continued to invest for the future with Gross investment
of GBP450m. This mainly comprised capital investment which was
directed at building capacity in our businesses and, increasingly,
expanding capabilities with automation and technology. Acquisitions
in Ingredients and Grocery accounted for GBP114m.
The cash outflow for the first half reflected our normal
seasonal build in sugar inventories and the payment of final and
special dividends for our last financial year. This was much
improved on the same period last year which was adversely affected
by the lengthy closure of most Primark stores. As a result, net
cash before lease liabilities at the half year was GBP1.5bn, which
compared to GBP705m a year ago. Net debt including lease
liabilities at the half year was GBP1.7bn giving a financial
leverage ratio of 0.8 times, demonstrating once again the strength
of our balance sheet.
The successful launch on 10 February of our inaugural public
bond of GBP400m, 2.5 per cent due 2034, diversified the Group's
sources of funding and extended the duration of our borrowings.
Some GBP221m of the remaining GBP297m Private Placement Notes have
been repaid this financial year.
Dividends
The Board was pleased to resume the payment of dividends for the
2021 financial year and a special dividend was also declared as a
sign of confidence in the recovery in trading across the Group's
activities.
This half year, the Board has declared an interim dividend of
13.8p per share which compares to the interim dividend declared
last year of 6.2p per share. This will be paid on 8 July 2022 to
shareholders registered at the close of business on 10 June
2022.
Capital allocation
Our capital allocation and treasury policies were set out in the
Annual Results Announcement of 9 November 2021. Our priority is
always to invest in our businesses, both organically and by
acquisition, at an appropriate pace and wherever attractive returns
on capital can be generated.
The Board recognises that the financial leverage of 0.8 times at
the half year is below 1.0 times and judges this appropriate given
the uncertainty of the current economic environment. The Board will
review the availability of surplus cash and capital at the year
end.
ESG
Our ESG priorities are shaped and led by the management of each
of our businesses, who apply their detailed local knowledge and
customer insights to identify the risks and develop the
opportunities relevant to their business. ESG actions become an
integral part of their business strategy and they are put into
effect with clear ownership.
Last year, we engaged extensively with our investors on the key
ESG factors for the Group and our strategy and governance in
relation to these. We provided an in-depth review of Primark's
processes to provide assurance of its supplier practices and of its
sustainability strategy, Primark Cares. The presentations for the
two briefings can both be found on our website.
We have committed to report our progress regularly. We have made
good progress since the launch of Primark Cares in September 2021
and the Operating Review details the encouraging increase in the
proportion of clothes made from recycled or more sustainable
materials and the percentage of cotton used that is organic,
recycled or sourced from our Sustainable Cotton Programme.
We have evaluated where climate change is likely to have the
most material impact on the Group and we will set out the relevant
scenario analyses in our full year reporting in accordance with the
requirements of TCFD.
We will be hosting an ESG Investor Briefing on 18 May, which
will focus on the environmental factors that are most material for
the Group.
Outlook
All our food businesses are experiencing increasing inflationary
pressures in many areas including raw materials, commodities,
supply chain and energy. Action has been taken to offset these
higher input costs through operational cost savings and, where
necessary, the implementation of price increases. However, the
benefit of price increases inevitably lags input cost inflation.
While we have no businesses in either country, commodity and energy
prices have increased further following the Russian invasion of
Ukraine. As a result, we now expect a greater margin reduction in
these businesses than previously expected for the full year. We
expect recovery in the run-rate of these margins but the full
effect of margin recovery is now anticipated in our next financial
year. We continue to expect an improvement in profit at AB Sugar
for the full year.
In Primark, we have seen a progressive easing of COVID-related
restrictions across our markets and an improvement in like-for-like
sales is evident in the UK and Ireland. With new store openings,
selling space at the end of this financial year will be 10% ahead
of the selling space at the end of the 2019 financial year. As a
consequence, total sales for Primark in the second half are
anticipated to be ahead of the second half of the 2019 financial
year, which was pre-COVID. Reflecting further inflationary
pressures, we now expect a greater reduction in the second half
operating profit margin than previously expected although the full
year Primark margin will be some 10%. We still anticipate Primark's
adjusted operating profit in the second half will be ahead of the
same period last year.
With the recovery in Primark's profitability, we expect the
Group's effective tax rate for the full year to be close to that of
the half year rate.
We will continue to invest in building the capacity and
capabilities of all our businesses.
Notwithstanding the greater inflationary pressures and lower
second half margins, we still expect growth in adjusted operating
profit for the Group in the second half compared to the same period
last year. Our outlook for the year is for significant progress in
adjusted operating profit and adjusted earnings per share for the
Group.
Michael McLintock
Chairman
Operating review
For the half year, sales and adjusted operating profit for the
Group were strongly ahead of the prior half year.
All our businesses have experienced increasing inflationary
pressures in many areas including raw materials, commodities,
supply chain and energy. We have not seen such a scale of inflation
in our major markets in recent times. The Group's devolved business
model ensures that our management teams are close to their markets
and customers, and they have responded to the challenge. We have
been taking steps to offset these higher input costs through
operational cost savings and, where necessary, the implementation
of price increases. However, actions on price inevitably lag input
cost inflation and margins in our food businesses declined in the
first half as a result. We are focused on recovering these margins
but given the extent of the inflation, the full effect is expected
in our next financial year.
Despite the inflationary pressures, we have continued to invest
in both marketing and new product development in our Grocery
brands. Twinings had particular success with the launch of further
products in Wellbeing teas, while at Acetum we continue to
internationalise the Mazzetti brand. Our Australian bread business
Tip Top successfully launched new products into growth markets such
as gluten-free bread.
AB Sugar delivered further growth in sales and operating profit
in the first half. Both Illovo and Azucarera increased their
domestic sugar volumes. Over the years we have invested in our
capability to produce valuable co-products. In addition to higher
sugar prices, higher prices for these co-products, especially
bioethanol and electricity, enabled our businesses to more than
offset the increase in energy cost in the first half.
ABF Ingredients performed well in the first half. Its
capabilities were enhanced in this period by the acquisition of the
Fytexia Group. This is an expert life science company, based in
France and Italy, which develops active nutrients for human health.
This business is fast-growing and it will broaden our product
portfolio to serve the pharmaceutical, nutritional, food and feed
markets.
Primark sales for the first half were well ahead of last year at
constant currency at 64%. All our stores remained open and trading
throughout the period except for short periods in Austria and The
Netherlands. Operating profit margin recovered strongly and reached
11.7%, in line with pre-COVID levels. This was primarily achieved
by the recovery in store sales densities as footfall has increased
and customers return to Primark. The effect of inflation on Primark
this first half has been broadly mitigated by a reduction in store
operating costs and a favourable US dollar exchange rate. With the
increasing inflationary pressures and dollar strengthening, we will
implement selective price increases across some of our
autumn/winter stock while remaining committed to ensuring our price
leadership and everyday affordability, which matters so much to
customers.
The table below shows the results by segment on a reported
basis.
Adjusted operating
Revenue profit
===================== ===================================== =====================================
24 weeks 24 weeks 53 weeks 24 weeks 24 weeks 53 weeks
ended ended ended ended ended ended
5 March 27 February 18 September 5 March 27 February 18 September
2022 2021 2021 2022 2021 2021
GBPm GBPm GBPm GBPm GBPm GBPm
===================== ======== ============ ============= ======== ============ =============
Operating segments
Grocery 1,821 1,834 3,593 175 199 413
Sugar 914 763 1,650 77 66 152
Agriculture 809 746 1,537 15 19 44
Ingredients 798 735 1,508 63 78 151
--------------------- -------- ------------ ------------- -------- ------------ -------------
Food 4,342 4,078 8,288 330 362 760
Retail 3,540 2,232 5,593 414 43 321
Central - - - (38) (37) (70)
===================== ======== ============ ============= ======== ============ =============
7,882 6,310 13,881 706 368 1,011
Businesses disposed:
Grocery - 2 2 -- 1 -
Ingredients - 1 1 - - -
===================== ======== ============ ============= ======== ============ =============
7,882 6,313 13,884 706 369 1,011
===================== ======== ============ ============= ======== ============ =============
References to changes in revenue and adjusted operating profit
in the following segmental commentary are based on constant
currency.
Grocery
Actual Constant
2022 2021 currency currency
=============================== ===== ===== ========== =========
Revenue GBPm 1,821 1,834 * 1% +2%
=============================== ===== ===== ========== =========
Adjusted operating profit GBPm 175 199 * 12% * 9%
=============================== ===== ===== ========== =========
Revenue in the first half was 2% ahead of last year in the face
of a number of challenges: retail volumes returned to more normal
levels after the COVID lockdowns last year, operating constraints
this year as a result of supply chain disruption and COVID-related
absences, and Allied Bakeries exiting the Co-op contract in April
last year. Operating profit margin reduced with high levels of
input cost inflation, especially in Allied Bakeries. Pricing
actions have already been implemented and more are in hand to
mitigate subsequent cost increases.
Twinings Ovaltine performed well in this period driven by
Ovaltine revenue growth in Switzerland and Germany and some
recovery in Thailand. In Twinings, further new product launches of
Wellbeing teas more than offset a reduction in the retail sales of
other teas from COVID-elevated levels last year.
Allied Bakeries sales were well below the same period last year.
Restaurant and take-away trade sales were strong for Westmill.
Sales were ahead at Acetum as we continue to internationalise and
develop the Mazzetti brand. Patak's, Blue Dragon and Al'Fez
performed strongly for AB World Foods but margins here, and at
Jordans Dorset Ryvita, reduced with the later phasing of price
increases.
ACH revenue growth was driven by the price increases for its
vegetable oils implemented over the last year to mitigate the
impact of higher commodity costs. Strong bakery ingredient volumes
more than offset declines in US retail yeast volumes compared to
the COVID-elevated levels during lockdowns. Adjusted operating
profit for George Weston Foods in Australia was ahead of last year,
despite COVID-related operational challenges in our Tip Top bread
and Don KRC meat businesses. Tip Top traded well with successful
new product launches into growth markets such as gluten-free bread.
In the period we developed our pie business in New Zealand with the
acquisition of Dad's Pies, a producer of premium pies.
Sugar
Actual Constant
2022 2021 currency currency
=============================== ==== ==== ========= =========
Revenue GBPm 914 763 +20% +19%
=============================== ==== ==== ========= =========
Adjusted operating profit GBPm 77 66 +17% +8%
=============================== ==== ==== ========= =========
AB Sugar traded strongly in the first half with revenue driven
by both higher domestic sales volumes in Illovo and Azucarera and
higher sugar and bioethanol prices. This period is the next step in
the recovery of profit with an increase of 8% over last year. All
businesses continued to focus on reducing the cost of sugar
production through on-going efficiency programmes. These cost
savings and the contribution from higher sales prices helped
mitigate the effects of significant input cost inflation,
particularly energy costs. The margin decline was driven by the
start-up costs for our Vivergo bioethanol plant included in this
period.
EU sugar prices continued to improve over last year as a result
of the continuation of low European sugar stocks. Our UK and
Spanish businesses have largely contracted sales for the year at
much improved prices compared to last year.
UK sugar production is now expected to be 1.03 million tonnes,
compared to 0.9 million tonnes produced in the last campaign, with
good growing conditions supporting higher yields and mitigating the
reduced growing area. The factories performed well, overcoming
early beet logistics issues which delayed the start of the
campaign. Energy costs remain at very high levels although
substantial forward cover mitigated to some degree the margin
impact during the first half. We have benefitted from strong
pricing of the electricity we produce for export and from the
bioethanol produced from sugar. Re-commissioning of the Vivergo
bioethanol plant is well underway.
The performance of Azucarera in Spain improved with higher
prices and volumes. Significantly improved sales volumes reflected
share recovery in Iberia. Sugar production is expected to be
significantly higher than last year, although mostly from lower
margin refined raws.
Illovo continued to deliver strong domestic sales in Zambia,
Malawi and Tanzania along with a strong contribution from
co-products in South Africa. However, there was some disruption to
production in Malawi, Eswatini and Mozambique in the period, in
large part due to adverse weather. Sugar production for the full
year is expected to be broadly in line with last year with earlier
season start-ups planned later this year to offset the delays
already experienced at the end of the current season. The
construction of our new sugar factory in Tanzania has begun.
AB Sugar China trading performance was in line with last
year.
Agriculture
Actual Constant
2022 2021 currency currency
=============================== ==== ==== ========== ==========
Revenue GBPm 809 746 +8% +9%
=============================== ==== ==== ========== ==========
Adjusted operating profit GBPm 15 19 * 21% * 17%
=============================== ==== ==== ========== ==========
Revenue at AB Agri was well ahead of last year in the first half
with higher selling prices reflecting commodity and energy cost
increases. Profit margins were reduced in the period compared to
the first half of the last financial year due to the later phasing
of mitigating pricing actions.
In the UK sales of monogastric feed benefited from increased
demand while pigs were held longer on farms due to meat processing
constraints, but piglet feed demand reduced in response to low pork
prices.
Frontier sales benefited from a strong start to the year for
certified seed, crop protection and fertiliser with farmers willing
to invest in crop inputs due to the strength of agricultural
commodity prices. The profit from grain merchanting was behind the
elevated levels last year when market volatility was high ahead of
the end of the Brexit transition period at the end of calendar
2020.
Our business in China traded well with the benefit of a range of
new premium products and we successfully opened a new mill in
Tongchuan, which makes compound feed for pigs and ruminants.
Ingredients
Actual Constant
2022 2021 currency currency
=============================== ==== ==== ========== ==========
Revenue GBPm 798 735 +9% +12%
=============================== ==== ==== ========== ==========
Adjusted operating profit GBPm 63 78 * 19% * 17%
=============================== ==== ==== ========== ==========
Revenue in the first half was 12% ahead of last year driven by
volume recoveries in a number of our businesses and the price
increases already implemented. However, margins were much lower as
significant inflation impacted costs ahead of price actions
especially in yeast and bakery ingredients.
AB Mauri revenues were ahead although held back by lower demand
for retail yeast and retail bakery ingredients compared to last
year when COVID restrictions were driving the popularity of home
baking. Adjusted operating profit was impacted by the lag in the
recovery of significant commodity input cost inflation and the
timing of customer price actions. We continued to invest in
capacity and capability. We opened a new facility in São Paulo,
Brazil, which incorporates an innovation laboratory and bakery
centre. A new specialty yeast plant is entering the final phase of
construction at our Hull site in the UK which will further expand
AB Biotek's ability to develop and deliver innovative products and
solutions.
The businesses in ABF Ingredients performed well, with revenue
significantly ahead driven by sustained volume recoveries and price
increases to compensate for input inflation. AB Enzymes continued
to see strong momentum in bakery, food and textiles and our animal
feed enzymes performed well in a competitive environment. Abitec,
our specialty lipids business, delivered sales growth in
pharmaceutical excipients and specialty human nutrition products.
Ohly, our yeast extracts business, traded well driven by new
products targeted at the attractive meat alternative and human
health and nutrition segments. This period we acquired the Fytexia
Group, an expert life science company based in France and Italy
which develops scientifically supported active nutrients for human
health. This business is fast-growing, and the acquisition will
broaden our product portfolio and enhance our capabilities to serve
the pharmaceutical, nutritional, food and feed markets.
Retail
Actual Constant
2022 2021 currency currency
=============================== ===== ===== ========= =========
Revenue GBPm 3,540 2,232 +59% +64%
=============================== ===== ===== ========= =========
Adjusted operating profit GBPm 414 43 +863% +781%
=============================== ===== ===== ========= =========
All Primark stores were trading at the period end and, with
minor exceptions, remained open throughout the half year. This
compared to prolonged periods of store closures in the UK and
Europe in the first half of last year. As a consequence, sales for
the first half were 64% ahead of last year and operating profit
margin recovered strongly to 11.7%, broadly in line with pre-COVID
levels achieved two years ago.
Like-for-like sales improved compared to the final quarter of
our 2021 financial year and for the first half were 10% lower than
pre-COVID levels in the same period two years ago. Total sales were
4% lower than pre-COVID levels two years ago having opened 27
stores which increased our selling space during this period. Sales
were disrupted by the Omicron infections in the middle of this half
year but subsequently we have seen like-for-like sales pick up
strongly in the UK and Ireland. However, recovery has been slower
in Continental Europe where some restrictions have persisted for
longer and consumer footfall has remained weaker.
Sales in our UK stores were well ahead of last year.
Like-for-like sales were 8% below two years ago and have continued
to improve after the period end. Stores in retail parks and town
centres have outperformed and footfall in destination city centre
stores has picked up as more customers return to work, socialise
and shop in city centres.
Sales in Continental Europe were also well ahead of last year.
Total sales were 3% below two years ago; like-for-like sales were
14% down, offset by a 12% increase in retail selling space.
Our US business traded well. Total sales were 37% ahead of two
years ago; like-for-like sales were 1% ahead of two years ago.
We have seen strong sales of luggage and holiday essentials such
as swimwear and sandals as customers return to holiday travel.
Sales of health and beauty also staged a recovery as customers
return to socialising and false eyelashes and nails performed
particularly well with demand boosted by promotion on our social
media channels. Homewares benefitted from more home entertaining.
Customer reaction to our new spring/summer fashion ranges has been
very positive. We continued to develop The Edit, our quality
investment pieces for women which first launched in the autumn, and
The Great Outdoors, our range of high-performance clothing and
accessories of which one-third is made from recycled or more
sustainably sourced materials.
Operating profit margin of 11.7% in the first half mainly
reflected our stores trading for the whole of the period with minor
exceptions. In this half year, inflation in raw materials and
supply chain costs was broadly mitigated by a favourable US dollar
exchange rate and a reduction in store operating costs. Our stock
purchases for the second half of the financial year are already
largely committed and we expect some reduction in the second half
operating profit margin compared to the first half. We expect
Primark's full year margin to be some 10%. With increasing
inflationary pressure and dollar strengthening, we will implement
selective price increases across some of our autumn/winter stock.
However, we are committed to ensuring our price leadership and
everyday affordability.
Following the launch last September of the sustainability
strategy, Primark Cares, we are developing key performance
indicators for the three pillars that will form the basis of ESG
reporting in our full year results. We are making progress in a
number of key areas, in line with our pledge to make more
sustainable choices affordable for all. Some 39% of all clothes
sold in the first half were made from recycled or more sustainably
sourced materials, a big step-up from 25% for the six months to
July 2021. More than half of the clothes we sell are made from
cotton and one-third of the cotton in our clothes is now recycled,
organic or sourced from the Primark Sustainable Cotton Programme,
up from 27% at the launch of Primark Cares. We have now trained
some 150,000 farmers in more sustainable farming practices under
this Programme, and we are well-placed to reach our target of
160,000 farmers by the end of this calendar year.
Six months
to Six months
March to July
2022 2021
--------------------------------------------------------------------- ---------- ----------
Proportion of clothes made from recycled or more sustainably sourced
materials (in unit sales) 39% 25%
--------------------------------------------------------------------- ---------- ----------
Proportion of cotton that is organic, recycled or sourced from
the Primark Sustainable Cotton Programme 33% 27%
--------------------------------------------------------------------- ---------- ----------
The disruption experienced in the supply chain in the autumn
continued to alleviate. However, we are still experiencing some
delays in dispatch at ports of origin and we expect longer shipping
times to continue for some time.
The roll-out of the Oracle stock management system across our
store estate is now complete and we are making good progress to
equip all stores with state-of-the art point of sale terminals.
We are transforming Primark's digital capability. We took a
significant step forward with the UK launch earlier this month of
our new customer website. The new site showcases many more of our
products and allows customers to check stock availability in their
chosen store. We have seen good early reaction from customers: in
the first two weeks, traffic to the new site doubled with customers
viewing on average twice as many individual pages per session. We
will add additional features including a customer account and the
ability to create a wishlist of favourite products enabling more
personalised marketing. We will roll out the new website across all
our markets by the autumn.
Retail selling space increased by 0.2 million sq ft since the
financial year end and at 5 March 2022 we were trading from 402
stores and
17.0 million sq ft of retail space, which compared to 16.5
million sq ft a year ago. Four new stores were opened in the
period: Catania in Sicily, Italy, and Vigo, Girona and Cadiz in
Spain. In addition, we relocated to larger premises in Gloucester
in the UK. Since the half year, we opened a new flagship store in
Milan city centre, Italy, which has been met by a very strong
customer response. We expect to add a net total of 0.5 million sq
ft of selling space this financial year.
We continue to make good progress in developing the pipeline of
new stores to deliver our ambition to grow our store estate to some
530 stores in the next five years. Our growth markets are the US,
France, Italy and Iberia. We will deliver a strong programme of
store openings in our next financial year with many currently
scheduled during the period up to Christmas 2022. We will also
enter the new markets of Romania and Slovakia during that financial
year, which will be our fifteenth and sixteenth markets. The US
will become a major market for us and, in addition to the six new
leases already announced, we have signed an additional three:
Walden Galleria Buffalo, in upstate New York, Jersey Gardens,
Elizabeth New Jersey, and Woodfield Mall, which will become our
second store in the Chicago area. We are already planning an
extension to our recently opened store in Sawgrass Mills,
Florida.
Principal risks and uncertainties
Managing our risks
Our approach to risk management
The delivery of our strategic objectives is dependent on
effective risk management. There are a number of potential risks
and uncertainties which could have a material impact on the Group's
performance and could cause actual results to differ materially
from expected and historical results. Details of the principal
risks facing the Group's businesses at an operational level were
included on pages 88 to 94 of the Group's Annual Report and
Accounts for the 53 weeks ended 18 September 2021, as part of the
Strategic Report.
We have reassessed our principal risks as the world faces the
repercussions and impacts of the ongoing geopolitical crisis
between Russia and Ukraine; together with the inflationary
pressures on raw materials, commodities and energy as economies
recover from the impacts of COVID.
In response to the geopolitical uncertainties, our procurement
teams have been working closely with suppliers to help them assess
their business continuity plans and where appropriate to identify
and establish alternative suppliers for essential ingredients and
services. In addition, some of our businesses are looking at
amending recipes to substitute ingredients, such as sunflower oil,
which are likely to be in short supply.
Our businesses remain on high alert to the heightened risk of IT
security breaches and cyber-based attacks. We continue to invest in
monitoring and detection capabilities.
Whilst the majority of the world is emerging from the COVID
pandemic, localised restrictions remain a risk, particularly in
Asia.
The purchase of merchandise denominated in foreign currencies by
Primark is the most material currency transaction risk for the
Group, although Primark is now fully bought for this financial
year. The crisis in Ukraine has led to significant volatility in FX
markets and a general strengthening of the US dollar, and other
commodity-independent currencies such as the Australian dollar,
versus Sterling and the Euro. The net impact of these moves will
likely lead to a small translation gain in the second half of the
financial year.
The Group purchases a wide range of commodities, including the
consumption of energy, in the ordinary course of business. We
constantly monitor the markets in which we operate and manage
certain of these exposures with fixed price supply contracts,
exchange traded contracts and hedging instruments. The commercial
implications of commodity price movements are continuously assessed
and, where appropriate, are reflected in the pricing of our
products.
The number of employees working from home continues to be high
and they are supported by effective collaboration tools with
appropriate IT infrastructure and bandwidth. Remote working has
increased the exposure to phishing attacks, which together with
socially engineered fraud, have become more sophisticated. In
response to this we have worked on increasing user awareness and
have implemented higher levels of monitoring.
The Group continues to focus on tightly managing cash flow and
maintaining a very strong level of liquidity, further strengthened
by the issuance of ABF's GBP400m 12-year inaugural public bond in
February 2022.
Going concern
After making enquiries, the directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. For this reason,
they continue to adopt the going concern basis in preparing the
Condensed Consolidated Interim Financial Statements. See note 10 to
the Condensed Consolidated Interim Financial Statements.
Condensed consolidated income statement
for the 24 weeks ended 5 March 2022
24 weeks 24 weeks 53 weeks
ended ended ended
5 March 27 February 18 September
2022 2021 2021
Continuing operations Note GBPm GBPm GBPm
=================================================== ==== ======== ============ =============
Revenue 1 7,882 6,313 13,884
Operating costs before exceptional items (7,237) (5,996) (13,008)
Exceptional items 2 - (25) (151)
=================================================== ==== ======== ============ =============
645 292 725
Share of profit after tax from joint ventures
and associates 37 26 79
Profits less losses on disposal of non-current
assets 4 2 4
=================================================== ==== ======== ============ =============
Operating profit 686 320 808
--------------------------------------------------- ---- -------- ------------ -------------
Adjusted operating profit 706 369 1,011
Profits less losses on disposal of non-current
assets 4 2 4
Amortisation of non-operating intangibles (20) (24) (50)
Acquired inventory fair value adjustments - (1) (3)
Transaction costs (4) (1) (3)
Exceptional items 2 - (25) (151)
=================================================== ==== ======== ============ =============
Profits less losses on sale and closure of
businesses 6 (11) 5 20
=================================================== ==== ======== ============ =============
Profit before interest 675 325 828
Finance income 6 5 9
Finance expense (50) (52) (111)
Other financial income/(expense) 4 (3) (1)
=================================================== ==== ======== ============ =============
Profit before taxation 635 275 725
Adjusted profit before taxation 666 319 908
Profits less losses on disposal of non-current
assets 4 2 4
Amortisation of non-operating intangibles (20) (24) (50)
Acquired inventory fair value adjustments - (1) (3)
Transaction costs (4) (1) (3)
Exceptional items 2 - (25) (151)
Profits less losses on sale and closure of
businesses 6 (11) 5 20
=================================================== ==== ======== ============ =============
Taxation UK (excluding tax on exceptional items) (29) (18) (68)
UK (on exceptional items) - 3 3
Overseas (excluding tax on exceptional
items) (122) (90) (196)
Overseas (on exceptional items) - 2 34
================================================== ==== ======== ============ =============
3 (151) (103) (227)
=================================================== ==== ======== ============ =============
Profit for the period 484 172 498
=================================================== ==== ======== ============ =============
Attributable to
Equity shareholders 476 162 478
Non-controlling interests 8 10 20
=================================================== ==== ======== ============ =============
Profit for the period 484 172 498
=================================================== ==== ======== ============ =============
Basic and diluted earnings per ordinary share
(pence) 4 60.3 20.5 60.5
Dividends per share paid and proposed for the
period (pence) 5 13.8 6.2 26.7
Special dividend per share proposed for the
period (pence) 5 nil nil 13.8
Condensed consolidated statement of comprehensive income
for the 24 weeks ended 5 March 2022
24 weeks 24 weeks 53 weeks
ended ended ended
5 March 27 February 18 September
2022 2021 2021
GBPm GBPm GBPm
====================================================== ======== ============ =============
Profit for the period recognised in the income
statement 484 172 498
Other comprehensive income
Remeasurements of defined benefit schemes 300 448 559
Deferred tax associated with defined benefit schemes (74) (84) (144)
======================================================
Items that will not be reclassified to profit or
loss 226 364 415
Effect of movements in foreign exchange 5 (335) (355)
Net gain on hedge of net investment in foreign
subsidiaries 5 11 14
Reclassification adjustment for movements in foreign
exchange on subsidiaries disposed - (6) (6)
Movement in cash flow hedging position 72 (26) 39
Deferred tax associated with movement in cash flow
hedging position (3) (1) (14)
Share of other comprehensive income of joint ventures
and associates 7 (10) (10)
Effect of hyperinflationary economies 10 12 18
====================================================== ======== ============ =============
Items that are or may be subsequently reclassified
to profit or loss 96 (355) (314)
Other comprehensive income for the period 322 9 101
Total comprehensive income for the period 806 181 599
====================================================== ======== ============ =============
Attributable to
Equity shareholders 799 177 579
Non-controlling interests 7 4 20
====================================================== ======== ============ =============
Total comprehensive income for the period 806 181 599
====================================================== ======== ============ =============
Condensed consolidated balance sheet
at 5 March 2022
5 March 27 February 18 September
2022 2021 2021
Note GBPm GBPm GBPm
================================================= ==== ======= =========== ============
Non-current assets
Intangible assets 1,756 1,570 1,581
Property, plant and equipment 5,308 5,417 5,286
Right-of-use assets 2,511 2,772 2,649
Investments in joint ventures 271 256 278
Investments in associates 69 59 60
Employee benefits assets 9 942 531 640
Income tax 23 - 23
Deferred tax assets 191 217 218
Other receivables 53 58 55
================================================= ==== ======= =========== ============
Total non-current assets 11,124 10,880 10,790
================================================= ==== ======= =========== ============
Current assets
Assets classified as held for sale - - 13
Inventories 2,525 2,596 2,151
Biological assets 115 96 85
Trade and other receivables 1,507 1,381 1,367
Derivative assets 146 64 124
Current asset investments 7 34 33 32
Income tax 62 13 58
Cash and cash equivalents 7 2,190 1,112 2,275
================================================= ==== ======= =========== ============
Total current assets 6,579 5,295 6,105
================================================= ==== ======= =========== ============
Total assets 17,703 16,175 16,895
================================================= ==== ======= =========== ============
Current liabilities
Lease liabilities 7 (292) (290) (289)
Loans and overdrafts 7 (275) (213) (330)
Trade and other payables (2,466) (1,931) (2,386)
Derivative liabilities (40) (48) (34)
Income tax (152) (101) (172)
Provisions (80) (102) (71)
================================================= ==== ======= =========== ============
Total current liabilities (3,305) (2,685) (3,282)
================================================= ==== ======= =========== ============
Non-current liabilities
Lease liabilities 7 (2,849) (3,130) (2,992)
Loans 7 (473) (227) (76)
Provisions (35) (47) (31)
Deferred tax liabilities (456) (300) (363)
Employee benefits liabilities (145) (149) (147)
================================================= ==== ======= =========== ============
Total non-current liabilities (3,958) (3,853) (3,609)
================================================= ==== ======= =========== ============
Total liabilities (7,263) (6,538) (6,891)
================================================= ==== ======= =========== ============
Net assets 10,440 9,637 10,004
================================================= ==== ======= =========== ============
Equity
Issued capital 45 45 45
Other reserves 175 175 175
Translation reserve (16) (11) (34)
Hedging reserve 61 - 43
Retained earnings 10,091 9,359 9,692
================================================= ==== ======= =========== ============
Total equity attributable to equity shareholders 10,356 9,568 9,921
Non-controlling interests 84 69 83
================================================= ==== ======= =========== ============
Total equity 10,440 9,637 10,004
================================================= ==== ======= =========== ============
Condensed consolidated cash flow statement
for the 24 weeks ended 5 March 2022
Note 24 weeks ended 5 March 24 weeks ended 27 February 53 weeks ended 18 September
2022 2021 2021
GBPm GBPm GBPm
============================ ==== ====================== ============================ ============================
Cash flow from operating
activities
Profit before taxation 635 275 725
Profits less losses on
disposal of non-current
assets (4) (2) (4)
Profits less losses on sale
and closure of businesses 11 (5) (20)
Transaction costs 4 1 3
Finance income (6) (5) (9)
Finance expense 50 52 111
Other financial
(income)/expense (4) 3 1
Share of profit after tax
from joint ventures and
associates (37) (26) (79)
Amortisation 33 34 74
Depreciation (including
depreciation of
right-of-use assets and
non-cash lease adjustments) 373 409 823
Exceptional items - 25 151
Acquired inventory fair
value adjustments - 1 3
Effect of hyperinflationary
economies 2 2 7
Net change in the fair value
of current biological
assets (29) (32) (12)
Share-based payment expense 8 8 17
Pension costs less
contributions 3 4 4
Increase in inventories (376) (565) (120)
Increase in receivables (122) (113) (98)
Increase/(decrease) in
payables 46 (269) 175
Purchases less sales of
current biological assets - - (1)
Increase/(decrease) in
provisions 13 (16) (40)
============================ ==== ====================== ============================ ============================
Cash generated
from/(utilised in)
operations 600 (219) 1,711
Income taxes paid (150) (160) (298)
============================ ==== ====================== ============================ ============================
Net cash generated
from/(utilised in)
operating activities 450 (379) 1,413
============================ ==== ====================== ============================ ============================
Cash flow from investing
activities
Dividends received from
joint ventures and
associates 45 27 63
Purchase of property, plant
and equipment (272) (263) (551)
Purchase of intangibles (64) (44) (76)
Lease incentives received 8 12 10
Sale of property, plant and
equipment 10 9 21
Purchase of subsidiaries,
joint ventures and
associates 6 (114) (39) (57)
Sale of subsidiaries, joint
ventures and associates 6 - 34 34
Purchase of other
investments - (13) (14)
Interest received 4 6 9
============================ ==== ====================== ============================ ============================
Net cash used in investing
activities (383) (271) (561)
============================ ==== ====================== ============================ ============================
Cash flow from financing
activities
Dividends paid to
non-controlling interests (6) (2) (4)
Dividends paid to equity
shareholders 5 (271) - (49)
Interest paid (48) (56) (116)
Repayment of lease
liabilities 7 (131) (131) (290)
(Decrease)/increase in
short-term loans 7 (80) 4 (10)
Increase/(decrease) in
long-term loans 7 402 - (18)
Increase in current asset
investments 7 (1) (2) (2)
Movement from changes in own
shares held (50) - -
Purchase of shares in
subsidiary undertaking from
non-controlling interests - (23) (23)
============================ ==== ====================== ============================ ============================
Net cash used in financing
activities (185) (210) (512)
============================ ==== ====================== ============================ ============================
Net (decrease)/increase in
cash and cash equivalents (118) (860) 340
Cash and cash equivalents at
the beginning of the period 2,189 1,909 1,909
Effect of movements in
foreign exchange 20 (23) (60)
============================ ==== ====================== ============================ ============================
Cash and cash equivalents at
the end of the period 7 2,091 1,026 2,189
============================ ==== ====================== ============================ ============================
Condensed consolidated statement of changes in equity
for the 24 weeks ended 5 March 2022
Attributable to equity shareholders
===== ============================================================= =============== =======
Note Issued Other Translation Hedging Retained Non-controlling Total
capital reserves reserve reserve earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
====================== ===== ======== ========= =========== ======== ========= ====== =============== =======
Balance as at 18
September 2021 45 175 (34) 43 9,692 9,921 83 10,004
Total comprehensive
income
Profit for the period
recognised
in the income
statement - - - - 476 476 8 484
Remeasurements of
defined benefit
schemes - - - - 300 300 - 300
Deferred tax
associated with
defined
benefit schemes - - - - (74) (74) - (74)
====================== ===== ======== ========= =========== ======== ========= ====== =============== =======
Items that will not be
reclassified
to profit or loss - - - - 226 226 - 226
Effect of movements in
foreign exchange - - 6 - - 6 (1) 5
Net gain on hedge of
net investment
in foreign
subsidiaries - - 5 - - 5 - 5
Movement in cash flow
hedging position - - - 72 - 72 - 72
Deferred tax
associated with
movement
in cash flow hedging
position - - - (3) - (3) - (3)
Share of other
comprehensive income
of joint ventures and
associates - - 7 - - 7 - 7
Effect of
hyperinflationary
economies - - - - 10 10 - 10
---------------------- ----- -------- --------- ----------- -------- --------- ------ --------------- -------
Items that are or may
be reclassified
to profit or loss - - 18 69 10 97 (1) 96
Other comprehensive
income - - 18 69 236 323 (1) 322
Total comprehensive
income - - 18 69 712 799 7 806
---------------------- ----- -------- --------- ----------- -------- --------- ------ --------------- -------
Inventory cash flow
hedge movements
Gains transferred to
cost of inventory - - - (51) - (51) - (51)
---------------------- ----- -------- --------- ----------- -------- --------- ------ --------------- -------
Total inventory cash
flow hedge movements - - - (51) - (51) - (51)
---------------------- ----- -------- --------- ----------- -------- --------- ------ --------------- -------
Transactions with
owners
Dividends paid to
equity shareholders 5 - - - - (271) (271) - (271)
Net movement in own
shares held - - - - (42) (42) - (42)
Dividends paid to
non-controlling
interests - - - - - - (6) (6)
Total transactions
with owners - - - - (313) (313) (6) (319)
====================== ===== ======== ========= =========== ======== ========= ====== =============== =======
Balance as at 5 March
2022 45 175 (16) 61 10,091 10,356 84 10,440
---------------------- ----- -------- --------- ----------- -------- --------- ------ --------------- -------
Balance as at 12
September 2020 45 175 323 (7) 8,819 9,355 84 9,439
Total comprehensive
income
Profit for the period
recognised
in the income
statement - - - - 162 162 10 172
Remeasurements of
defined benefit
schemes - - - - 448 448 - 448
Deferred tax
associated with
defined
benefit schemes - - - - (84) (84) - (84)
====================== ===== ======== ========= =========== ======== ========= ====== =============== =======
Items that will not be
reclassified
to profit or loss - - - - 364 364 - 364
Effect of movements in
foreign exchange - - (329) - - (329) (6) (335)
Net gain on hedge of
net investment
in foreign
subsidiaries - - 11 - - 11 - 11
Reclassification
adjustment for
movements
in foreign exchange
on subsidiaries
disposed - - (6) - - (6) - (6)
Movement in cash flow
hedging position - - - (26) - (26) - (26)
Deferred tax
associated with
movement
in cash flow hedging
position - - - (1) - (1) - (1)
Share of other
comprehensive income
of joint ventures and
associates - - (10) - - (10) - (10)
Effect of
hyperinflationary
economies - - - - 12 12 - 12
====================== ===== ======== ========= =========== ======== ========= ====== =============== =======
Items that are or may
be subsequently
reclassified to
profit or loss - - (334) (27) 12 (349) (6) (355)
Other comprehensive
income - - (334) (27) 376 15 (6) 9
Total comprehensive
income - - (334) (27) 538 177 4 181
====================== ===== ======== ========= =========== ======== ========= ====== =============== =======
Inventory cash flow
hedge movements
Losses transferred to
cost of inventory - - - 34 - 34 - 34
====================== ===== ======== ========= =========== ======== ========= ====== =============== =======
Total inventory cash
flow hedge movements - - - 34 - 34 - 34
====================== ===== ======== ========= =========== ======== ========= ====== =============== =======
Transactions with
owners
Net movement in own
shares held - - - - 8 8 - 8
Dividends paid to
non-controlling
interests - - - - - - (2) (2)
Acquisition of
non-controlling
interests - - - - (6) (6) (17) (23)
====================== ===== ======== ========= =========== ======== ========= ====== =============== =======
Total transactions
with owners - - - - 2 2 (19) (17)
====================== ===== ======== ========= =========== ======== ========= ====== =============== =======
Balance as at 27
February 2021 45 175 (11) - 9,359 9,568 69 9,637
====================== ===== ======== ========= =========== ======== ========= ====== =============== =======
Condensed consolidated statement of changes in equity
(continued)
for the 24 weeks ended 5 March 2022
Attributable to equity shareholders
======================================================== =============== =======
Issued Other Translation Hedging Retained Non-controlling Total
capital reserves reserve reserve earnings Total interests equity
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================================= ======= ======== =========== ======= ======== ===== =============== =========
Balance as at 12 September 2020 45 175 323 (7) 8,819 9,355 84 9,439
Total comprehensive income
Profit for the period recognised
in the income statement - - - - 478 478 20 498
Remeasurements of defined benefit
schemes - - - - 559 559 - 559
Deferred tax associated with
defined
benefit schemes - - - - (144) (144) - (144)
================================= ======= ======== =========== ======= ======== ===== =============== =======
Items that will not be
reclassified
to profit or loss - - - - 415 415 - 415
Effect of movements in foreign
exchange - - (355) - - (355) - (355)
Net gain on hedge of net
investment
in foreign subsidiaries - - 14 - - 14 - 14
Reclassification adjustment for
movements in foreign exchange on
subsidiaries disposed - - (6) - - (6) - (6)
Movement in cash flow hedging
position - - - 39 - 39 - 39
Deferred tax associated with
movement
in cash flow hedging position - - - (14) - (14) - (14)
Share of other comprehensive
income
of joint ventures and associates - - (10) - - (10) - (10)
Effect of hyperinflationary
economies - - - - 18 18 - 18
================================= ======= ======== =========== ======= ======== ===== =============== =======
Items that are or may be
subsequently
reclassified to profit or loss - - (357) 25 18 (314) - (314)
Other comprehensive income - - (357) 25 433 101 - 101
Total comprehensive income - - (357) 25 911 579 20 599
================================= ======= ======== =========== ======= ======== ===== =============== =======
Inventory cash flow hedge
movements
Losses transferred to cost of
inventory - - - 25 - 25 - 25
================================= ======= ======== =========== ======= ======== ===== =============== =======
Total inventory cash flow hedge
movements - - - 25 - 25 - 25
================================= ======= ======== =========== ======= ======== ===== =============== =======
Transactions with owners
Dividends paid to equity
shareholders
5 - - - - (49) (49) - (49)
Net movement in own shares held - - - - 17 17 - 17
Dividends paid to non-controlling
interests - - - - - - (4) (4)
Acquisition of non-controlling
interests - - - - (6) (6) (17) (23)
================================= ======= ======== =========== ======= ======== ===== =============== =======
Total transactions with owners - - - - (38) (38) (21) (59)
================================= ======= ======== =========== ======= ======== ===== =============== =======
Balance as at 18 September 2021 45 175 (34) 43 9,692 9,921 83 10,004
================================= ======= ======== =========== ======= ======== ===== =============== =======
1. Operating segments
The Group has five operating segments. These are the Group's
operating divisions, based on the management and internal reporting
structure, which combine businesses with common characteristics,
primarily in respect of the type of products offered by each
business, but also the production processes involved and the manner
of the distribution and sale of goods. The Board is the chief
operating decision-maker.
Inter-segment pricing is determined on an arm's length basis.
Segment result is adjusted operating profit, as shown on the face
of the consolidated income statement. Segment assets comprise all
non-current assets except employee benefits assets and deferred tax
assets, and all current assets except cash and cash equivalents,
current asset investments and income tax assets. Segment
liabilities comprise trade and other payables, derivative
liabilities, provisions and lease liabilities.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis. Unallocated items comprise mainly corporate
assets and expenses, cash, borrowings, employee benefits balances
and current and deferred tax balances.
Segment non-current asset additions are the total cost incurred
during the period to acquire segment assets that are expected to be
used for more than one year, comprising property, plant and
equipment, right-of-use assets, operating intangibles and
biological assets.
Businesses disposed are shown separately and comparatives have
been re-presented for businesses sold or closed during the
period.
The Group is comprised of the following operating segments:
Grocery
The manufacture of grocery products, including hot beverages,
sugar and sweeteners, vegetable oils, balsamic vinegars, bread and
baked goods, cereals, ethnic foods, and meat products, which are
sold to retail, wholesale and foodservice businesses.
Sugar
The growing and processing of sugar beet and sugar cane for sale
to industrial users and to Silver Spoon, which is included in the
Grocery segment.
Agriculture
The manufacture of animal feeds and the provision of other
products for the agriculture sector.
Ingredients
The manufacture of bakers' yeast, bakery ingredients, enzymes,
lipids, yeast extracts and cereal specialities.
Retail
Buying and merchandising value clothing and accessories through
the Primark and Penneys retail chains.
Geographical information
In addition to the required disclosure for operating segments,
disclosure is also given of certain geographical information about
the Group's operations, based on the geographical groupings: United
Kingdom; Europe & Africa; The Americas; and Asia Pacific.
Revenues are shown by reference to the geographical location of
customers. Profits are shown by reference to the geographical
location of the businesses. Segment assets are based on the
geographical location of the assets.
Adjusted operating
Revenue profit
========================= ===================================== =====================================
24 weeks 24 weeks 53 weeks 24 weeks 24 weeks 53 weeks
ended ended ended ended ended ended
5 March 27 February 18 September 5 March 27 February 18 September
2022 2021 2021 2022 2021 2021
GBPm GBPm GBPm GBPm GBPm GBPm
========================= ======== ============ ============= ======== ============ =============
Operating segments
Grocery 1,821 1,834 3,593 175 199 413
Sugar 914 763 1,650 77 66 152
Agriculture 809 746 1,537 15 19 44
Ingredients 798 735 1,508 63 78 151
------------------------- -------- ------------ ------------- -------- ------------ -------------
Food 4,342 4,078 8,288 330 362 760
Retail 3,540 2,232 5,593 414 43 321
Central - - - (38) (37) (70)
========================= ======== ============ ============= ======== ============ =============
7,882 6,310 13,881 706 368 1,011
Businesses disposed:
Grocery - 2 2 - 1 -
Ingredients - 1 1 - - -
========================= ======== ============ ============= ======== ============ =============
7,882 6,313 13,884 706 369 1,011
========================= ======== ============ ============= ======== ============ =============
Geographical information
United Kingdom 2,951 2,186 4,982 288 99 293
Europe & Africa 2,902 2,180 4,944 255 69 302
The Americas 919 801 1,678 107 130 259
Asia Pacific 1,110 1,143 2,277 56 70 157
========================= ======== ============ ============= ======== ============ =============
7,882 6,310 13,881 706 368 1,011
Businesses disposed:
Asia Pacific - 3 3 - 1 -
========================= ======== ============ ============= ======== ============ =============
7,882 6,313 13,884 706 369 1,011
========================= ======== ============ ============= ======== ============ =============
Operating segments for the 24 weeks ended 5 March 2022
Grocery Sugar Agriculture Ingredients Retail Central Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Revenue from continuing businesses 1,822 950 810 878 3,540 (118) 7,882
Internal revenue (1) (36) (1) (80) - 118 -
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
External revenue from continuing
businesses 1,821 914 809 798 3,540 - 7,882
Revenue from external customers 1,821 914 809 798 3,540 - 7,882
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Adjusted operating profit before
joint ventures and associates 150 75 13 54 414 (38) 668
Share of profit after tax from
joint ventures and associates 25 2 2 9 - - 38
------------------------------------------
Adjusted operating profit 175 77 15 63 414 (38) 706
Profits less losses on disposal
of non-current assets 3 - - - - 1 4
Amortisation of non-operating intangibles (15) - - (5) - - (20)
Transaction costs (1) - - (3) - - (4)
Profits less losses on sale and
closure of businesses - - - (11) - - (11)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Profit before interest 162 77 15 44 414 (37) 675
Finance income 6 6
Finance expense (1) (1) - - (35) (13) (50)
Other financial income 4 4
Taxation (151) (151)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Profit for the period 161 76 15 44 379 (191) 484
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Segment assets (excluding joint
ventures and associates) 2,611 2,099 519 1,722 6,805 165 13,921
Investments in joint ventures and
associates 37 32 141 130 - - 340
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Segment assets 2,648 2,131 660 1,852 6,805 165 14,261
Cash and cash equivalents 2,190 2,190
Current asset investments 34 34
Income tax 85 85
Deferred tax assets 191 191
Employee benefits assets 942 942
Segment liabilities (649) (461) (177) (349) (3,906) (220) (5,762)
Loans and overdrafts (748) (748)
Income tax (152) (152)
Deferred tax liabilities (456) (456)
Employee benefits liabilities (145) (145)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Net assets 1,999 1,670 483 1,503 2,899 1,886 10,440
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Non-current asset additions 55 120 14 73 142 1 405
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Depreciation and non-cash lease
adjustments (52) (42) (8) (26) (240) (5) (373)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Amortisation (20) (1) (1) (6) (5) - (33)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Impairment of property, plant,
equipment and right-of-use assets
on sale and closure of businesses - - - (11) - - (11)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Operating segments for the 24 weeks ended 27 February 2021
Grocery Sugar Agriculture Ingredients Retail Central Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Revenue from continuing businesses 1,835 798 747 825 2,232 (127) 6,310
Internal revenue (1) (35) (1) (90) - 127 -
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
External revenue from continuing
businesses 1,834 763 746 735 2,232 - 6,310
Businesses disposed 2 - - 1 - - 3
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Revenue from external customers 1,836 763 746 736 2,232 - 6,313
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Adjusted operating profit before
joint ventures and associates 186 64 16 69 43 (37) 341
Share of profit after tax from
joint ventures and associates 13 2 3 9 - - 27
Businesses disposed 1 - - - - - 1
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Adjusted operating profit 200 66 19 78 43 (37) 369
Profits less losses on disposal
of non-current assets 1 - - 1 - - 2
Amortisation of non-operating intangibles (20) - (1) (3) - - (24)
Acquired inventory fair value adjustments (1) - - - - - (1)
Transaction costs - - - (1) - - (1)
Exceptional items - - - - (21) (4) (25)
Profits less losses on sale and
closure of businesses - - - 5 - - 5
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Profit before interest 180 66 18 80 22 (41) 325
Finance income 5 5
Finance expense - (1) - - (37) (14) (52)
Other financial expense (3) (3)
Taxation (103) (103)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Profit for the period 180 65 18 80 (15) (156) 172
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Segment assets (excluding joint
ventures and associates) 2,585 1,925 466 1,394 7,417 167 13,954
Investments in joint ventures and
associates 36 27 139 113 - - 315
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Segment assets 2,621 1,952 605 1,507 7,417 167 14,269
Cash and cash equivalents 1,112 1,112
Current asset investments 33 33
Income tax 13 13
Deferred tax assets 217 217
Employee benefits assets 531 531
Segment liabilities (609) (334) (153) (302) (3,924) (226) (5,548)
Loans and overdrafts (440) (440)
Income tax (101) (101)
Deferred tax liabilities (300) (300)
Employee benefits liabilities (149) (149)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Net assets 2,012 1,618 452 1,205 3,493 857 9,637
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Non-current asset additions 44 50 10 59 162 8 333
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Depreciation and non-cash lease
adjustments (56) (47) (8) (27) (266) (5) (409)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Amortisation (24) (1) (2) (4) (2) (1) (34)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Operating segments for the 53 weeks ended 18 September 2021
Grocery Sugar Agriculture Ingredients Retail Central Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Revenue from continuing businesses 3,594 1,714 1,539 1,687 5,593 (246) 13,881
Internal revenue (1) (64) (2) (179) - 246 -
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
External revenue from continuing
businesses 3,593 1,650 1,537 1,508 5,593 - 13,881
Businesses disposed 2 - - 1 - - 3
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Revenue from external customers 3,595 1,650 1,537 1,509 5,593 - 13,884
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Adjusted operating profit before
joint ventures and associates 364 149 31 134 321 (70) 929
Share of profit after tax from
joint ventures and associates 49 3 13 17 - - 82
------------------------------------------
Adjusted operating profit 413 152 44 151 321 (70) 1,011
Profits less losses on disposal
of non-current assets 2 1 - 1 - - 4
Amortisation of non-operating intangibles (41) - (2) (7) - - (50)
Acquired inventory fair value adjustments (3) - - - - - (3)
Transaction costs - - - (2) - (1) (3)
Exceptional items - (141) - - (6) (4) (151)
Profits less losses on sale and
closure of businesses - - - 19 - 1 20
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Profit before interest 371 12 42 162 315 (74) 828
Finance income 9 9
Finance expense (1) (2) - (1) (80) (27) (111)
Other financial expense (1) (1)
Taxation (227) (227)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Profit for the period 370 10 42 161 235 (320) 498
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Segment assets (excluding joint
ventures and associates) 2,541 1,776 441 1,480 6,919 154 13,311
Investments in joint ventures and
associates 53 28 139 118 - - 338
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Segment assets 2,594 1,804 580 1,598 6,919 154 13,649
Cash and cash equivalents 2,275 2,275
Current asset investments 32 32
Income tax 81 81
Deferred tax assets 218 218
Employee benefits assets 640 640
Segment liabilities (601) (361) (151) (340) (4,142) (208) (5,803)
Loans and overdrafts (406) (406)
Income tax (172) (172)
Deferred tax liabilities (363) (363)
Employee benefits liabilities (147) (147)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Net assets 1,993 1,443 429 1,258 2,777 2,104 10,004
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Non-current asset additions 113 134 21 118 343 16 745
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Depreciation and non-cash lease
adjustments (110) (82) (16) (56) (549) (10) (823)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Amortisation (48) (4) (3) (9) (8) (2) (74)
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Reversal of impairment of property,
plant, equipment and right-of-use
assets on sale and closure of businesses - - - 10 - - 10
------------------------------------------ ------- ----- ----------- ----------- ------- ------- -------
Geographical information for the 24 weeks ended 5 March 2022
United Europe
Kingdom & Africa The Americas Asia Pacific Total
GBPm GBPm GBPm GBPm GBPm
----------------------------------- -------- --------- ------------ ------------ ------
Revenue from external customers 2,951 2,902 919 1,110 7,882
----------------------------------- -------- --------- ------------ ------------ ------
Segment assets 5,449 5,856 1,415 1,541 14,261
----------------------------------- -------- --------- ------------ ------------ ------
Non-current asset additions 139 170 54 42 405
----------------------------------- -------- --------- ------------ ------------ ------
Depreciation and non-cash lease
adjustments (138) (176) (29) (30) (373)
----------------------------------- -------- --------- ------------ ------------ ------
Amortisation (14) (13) (3) (3) (33)
----------------------------------- -------- --------- ------------ ------------ ------
Transaction costs (3) - - (1) (4)
----------------------------------- -------- --------- ------------ ------------ ------
Impairment of property, plant,
equipment and right-of-use assets
on sale and closure of businesses - - - (11) (11)
----------------------------------- -------- --------- ------------ ------------ ------
Geographical information for the 24 weeks ended 27 February
2021
United Europe
Kingdom & Africa The Americas Asia Pacific Total
GBPm GBPm GBPm GBPm GBPm
------------------------------------------ -------- --------- ------------ ------------ ------
Revenue from external customers 2,186 2,180 801 1,146 6,313
------------------------------------------ -------- --------- ------------ ------------ ------
Segment assets 5,577 6,020 1,214 1,458 14,269
------------------------------------------ -------- --------- ------------ ------------ ------
Non-current asset additions 98 164 32 39 333
------------------------------------------ -------- --------- ------------ ------------ ------
Depreciation and non-cash lease
adjustments (144) (203) (30) (32) (409)
------------------------------------------ -------- --------- ------------ ------------ ------
Amortisation (17) (10) (4) (3) (34)
------------------------------------------ -------- --------- ------------ ------------ ------
Acquired inventory fair value adjustments - (1) - - (1)
------------------------------------------ -------- --------- ------------ ------------ ------
Transaction costs - - - (1) (1)
------------------------------------------ -------- --------- ------------ ------------ ------
Exceptional items (18) (7) - - (25)
------------------------------------------ -------- --------- ------------ ------------ ------
Geographical information for the 53 weeks ended 18 September
2021
United Europe
Kingdom & Africa The Americas Asia Pacific Total
GBPm GBPm GBPm GBPm GBPm
------------------------------------------ -------- --------- ------------ ------------ ------
Revenue from external customers 4,982 4,944 1,678 2,280 13,884
------------------------------------------ -------- --------- ------------ ------------ ------
Segment assets 5,178 5,754 1,324 1,393 13,649
------------------------------------------ -------- --------- ------------ ------------ ------
Non-current asset additions 200 382 74 89 745
------------------------------------------ -------- --------- ------------ ------------ ------
Depreciation and non-cash lease
adjustments (288) (406) (62) (67) (823)
------------------------------------------ -------- --------- ------------ ------------ ------
Amortisation (35) (26) (7) (6) (74)
------------------------------------------ -------- --------- ------------ ------------ ------
Acquired inventory fair value adjustments - (3) - - (3)
------------------------------------------ -------- --------- ------------ ------------ ------
Reversal of impairment of property,
plant, equipment and right-of-use
assets on sale and closure of businesses - - - 10 10
------------------------------------------ -------- --------- ------------ ------------ ------
Transaction costs (2) - - (1) (3)
------------------------------------------ -------- --------- ------------ ------------ ------
Exceptional items (13) (117) - (21) (151)
------------------------------------------ -------- --------- ------------ ------------ ------
The Group's operations in the following countries met the
criteria for separate disclosure:
Revenue Non-current assets
24 weeks 53 weeks 24 weeks 53 weeks
24 weeks ended ended 24 weeks ended ended
ended 27 18 ended 27 18
5 March February September 5 March February September
2022 2021 2021 2022 2021 2021
GBPm GBPm GBPm GBPm GBPm GBPm
-------------- ======== ========= ========== ======== ========= ==========
Australia 571 601 1,209 568 545 533
Spain 748 541 1,190 635 776 670
United States 614 530 1,098 683 651 672
-------------- -------- --------- ---------- -------- --------- ----------
All segment disclosures are stated before reclassification of
assets and liabilities classified as held for sale.
2. Exceptional items
2021
Exceptional items of GBP151m for the 53 weeks ended 18 September
2021 included impairments of GBP141m in property, plant and
equipment at Azucarera and other sugar businesses, a GBP21m
inventory charge in Primark, the reversal of GBP20m of the GBP22m
Primark inventory provision raised in 2020, a GBP5m provision for
excessive stock of COVID-19 related items in Primark and a GBP4m
pension past service cost following a further High Court ruling on
20 November 2020 regarding the equalisation of Guaranteed Minimum
Pensions.
Our prior year half year results were announced on 20 April 2021
and included an exceptional inventory impairment charge of GBP21m
in Primark, which related to certain seasonal items already on
display in closed stores and which could not be sold before the end
of the season. These items had been cleared from our stores and the
exceptional provision was charged to reflect the write down of this
inventory to net realisable value, which was subsequently utilised.
The GBP4m pension past service cost was recorded in the first
half.
3. Income tax expense
24 weeks 24 weeks 53 weeks
ended ended ended
5 March 27 February 18 September
2022 2021 2021
GBPm GBPm GBPm
----------------------------------------------------- ======== ============ =============
Current tax expense
UK - corporation tax at 19% (2021 - 19%) 18 12 46
Overseas - corporation tax 112 98 208
UK - under provided in prior periods 1 - 9
Overseas - over provided in prior periods (3) (2) (9)
----------------------------------------------------- -------- ------------ -------------
128 108 254
Deferred tax expense
UK deferred tax 10 3 13
Overseas deferred tax 12 (8) (37)
UK - over provided in prior periods - - (3)
Overseas - under provided in prior periods 1 - -
----------------------------------------------------- -------- ------------ -------------
23 (5) (27)
----------------------------------------------------- -------- ------------ -------------
Total income tax expense in income statement 151 103 227
----------------------------------------------------- -------- ------------ -------------
Reconciliation of effective tax rate
Profit before taxation 635 275 725
Less share of profit after tax from joint ventures
and associates (37) (26) (79)
----------------------------------------------------- -------- ------------ -------------
Profit before taxation excluding share of profit
after tax from joint ventures and associates 598 249 646
Nominal tax charge at UK corporation tax rate of
19% (2021 - 19%) 114 47 123
Effect of higher and lower tax rates on overseas
earnings 7 26 33
Effect of changes in tax rates on income statement 3 - 17
Expenses not deductible for tax purposes 24 26 51
Disposal of assets covered by tax exemptions or
unrecognised capital losses 1 - (3)
Deferred tax not recognised 3 6 9
Adjustments in respect of prior periods (1) (2) (3)
----------------------------------------------------- -------- ------------ -------------
151 103 227
----------------------------------------------------- -------- ------------ -------------
Income tax recognised directly in equity
Deferred tax associated with defined benefit schemes 74 84 144
Deferred tax associated with movement in cash flow
hedging position 3 1 14
77 85 158
----------------------------------------------------- -------- ------------ -------------
The adjusted tax rate of 23.2% is the estimated weighted average
annual tax rate based on full year projections and has been applied
to profit before adjusting items for the 24 weeks ended 5 March
2022. The tax impact of adjusting items has been calculated on an
item-by-item basis.
The UK corporation tax rate of 19% is set to increase to 25%
from 1 April 2023. The legislation to effect these changes was
enacted before the 2021 year end balance sheet date and UK deferred
tax has been calculated accordingly.
In April 2019 the European Commission published its decision on
the Group Financing Exemption in the UK's controlled foreign
company legislation. The Commission found that the UK law did not
comply with EU State Aid rules in certain circumstances. The Group
has arrangements that may be impacted by this decision as might
other UK-based multinational groups that had financing arrangements
in line with the UK's legislation in force at the time. The Group
has appealed against the European Commission's decision, as have
the UK Government and a number of other UK companies. We have
calculated our maximum potential liability to be GBP26m (2021 year
end: GBP26m; 2021 half year: GBP27m), however we do not consider
that any provision is required in respect of this amount based on
our current assessment of the issue. Following receipt of charging
notices from HM Revenue & Customs ('HMRC'), we made payments to
HMRC in the prior year. Our assessment remains that no provision is
required in respect of this amount. We will continue to consider
the impact of the Commission's decision on the Group and the
potential requirement to record a provision.
4. Earnings per share
24 weeks 24 weeks 53 weeks
ended ended ended
5 March 27 February 18 September
2022 2021 2021
pence pence pence
----------------------------------------------------- ======== ============ =============
Adjusted earnings per share 63.8 25.1 80.1
Disposal of non-current assets 0.5 0.3 0.5
Sale and closure of businesses (1.4) 0.6 2.5
Acquired inventory fair value adjustments - (0.1) (0.4)
Transaction costs (0.5) (0.1) (0.4)
Exceptional items - (3.2) (19.1)
Tax effect on above adjustments - 0.3 3.0
Amortisation of non-operating intangibles (2.5) (3.0) (6.3)
Tax credit on non-operating intangibles amortisation
and goodwill 0.4 0.6 0.6
------------------------------------------------------ -------- ------------ -------------
Earnings per ordinary share 60.3 20.5 60.5
------------------------------------------------------ -------- ------------ -------------
5. Dividends
24 weeks 24 weeks 53 weeks 24 weeks 24 weeks 53 weeks
ended ended ended ended ended ended
5 March 27 February 18 September 5 March 27 February 18 September
2022 2021 2021 2022 2021 2021
pence pence pence GBPm GBPm GBPm
------------- ======== ============ ============= ======== ============ =============
2021 interim - 6.2 - 49
2021 final 20.5 - - 162 - -
2021 special 13.8 - - 109 - -
------------- -------- ------------ ------------- -------- ------------ -------------
34.3 - 6.2 271 - 49
------------- -------- ------------ ------------- -------- ------------ -------------
The combined 2021 final and special dividend of 34.3p was
approved on 10 December 2021 and totalled GBP271m when paid on 14
January 2022. The 2022 interim dividend of 13.8p per share,
totalling GBP109m will be paid on 8 July 2022 to shareholders on
the register on 10 June 2022.
6. Acquisitions and disposals
Acquisitions
2022
On 31 January 2022, the Group acquired 100% of Fytexia, a B2B
specialty ingredients business in France and Italy producing and
formulating polyphenols-based active ingredients for the dietary
supplements industry. The Group also acquired a small grocery
company in New Zealand and a small agriculture business in Finland
during the period. The acquisitions had the following effect on the
Group's assets and liabilities:
Pre-acquisition Recognised values
carrying on acquisition
---------------------
values Fytexia Other Total
GBPm GBPm GBPm GBPm
---------------------------------------- --------------- ------- ----- -----
Net assets
Intangible assets - 54 7 61
Property, plant and equipment 5 1 4 5
Right-of-use assets 8 - 8 8
Inventory 3 2 1 3
Trade and other receivables 3 2 1 3
Cash 8 6 2 8
Lease liabilities (8) - (8) (8)
Short-term loans (13) (11) (2) (13)
Trade and other payables (3) (2) (1) (3)
Provisions (6) (6) - (6)
Taxation - (14) (2) (16)
Net identifiable assets and liabilities (3) 32 10 42
Goodwill 61 10 71
Total consideration 93 20 113
---------------------------------------- --------------- ------- ----- -----
Recognised
values
on acquisition
GBPm
----------------------------------- ---------------
Satisfied by
Cash consideration 111
Deferred consideration 2
----------------------------------- ---------------
113
----------------------------------- ---------------
Net cash
Cash consideration 111
Cash and cash equivalents acquired (8)
103
----------------------------------- ---------------
Pre-acquisition carrying amounts were the same as recognised
values on acquisition apart from GBP61m of non-operating
intangibles in respect of brands, technology and customer
relationships, a GBP16m related deferred tax liability and goodwill
of GBP71m. Cash flow on acquisition of subsidiaries, joint ventures
and associates of GBP114m comprised GBP111m cash consideration less
GBP8m cash acquired, a GBP4m contribution to an existing joint
venture in China and GBP7m of deferred consideration relating to
previous acquisitions.
2021
In the second half of 2021, the Group acquired DR Healthcare
España, a Spanish enzymes producer (Ingredients segment). Total
consideration was GBP14m, comprising GBP12m cash consideration and
GBP2m deferred consideration. Net assets acquired included
non-operating intangible assets of GBP19m together with related
deferred tax of GBP5m.
During the period, the Group contributed GBP43m (GBP39m in the
half year results) to the bakery ingredients joint venture in China
with Wilmar International and also paid GBP2m of deferred
consideration relating to previous acquisitions.
Disposals
2022
There were no disposals in the first half. The transaction to
sell a further yeast company to the joint venture with Wilmar
International in China (classified as held for sale at the end of
last year) is no longer going ahead. The GBP10m non-cash impairment
reversed last year through profit/(loss) on sale and closure of
business has therefore been reinstated at a cost of GBP11m.
2021
In the first half of 2021, the Group sold a number of Chinese
yeast and bakery ingredients businesses into a new Chinese joint
venture with Wilmar International. Gross cash consideration was
GBP39m with GBP5m of cash disposed with the businesses. The joint
venture also assumed GBP11m of debt, resulting in net proceeds of
GBP45m. Net assets disposed were GBP33m with provisions of GBP6m
for associated restructuring costs and a GBP6m gain on the
recycling of foreign exchange differences. The gain on disposal was
GBP6m at year end and GBP4m at the half year.
Closure provisions of GBP3m relating to disposals made in
previous years were no longer required and were released to sale
and closure of business in Ingredients and Grocery, both in Asia
Pacific. Property provisions of GBP1m held in previous years were
also no longer required and were released in the Central and UK
segments. The half year release was GBP1m of closure provisions no
longer required in the Asia Pacific and Ingredients segments.
7. Analysis of net debt
At New leases At
18 September and non-cash Exchange 5 March
2021 Cash flow Acquisitions items adjustments 2022
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- ------------- --------- ------------ ------------- ------------ --------
Short-term loans (244) 80 (13) - 1 (176)
Long-term loans (76) (402) - - 5 (473)
Lease liabilities (3,281) 131 (8) (25) 42 (3,141)
--------------------------------- ------------- --------- ------------ ------------- ------------ --------
Total liabilities from financing
activities (3,601) (191) (21) (25) 48 (3,790)
--------------------------------- ------------- --------- ------------ ------------- ------------ --------
Cash at bank and in hand,
cash equivalents and overdrafts 2,189 (118) - - 20 2,091
Current asset investments 32 1 - - 1 34
--------------------------------- ------------- --------- ------------ ------------- ------------ --------
Net debt including lease
liabilities (1,380) (308) (21) (25) 69 (1,665)
--------------------------------- ------------- --------- ------------ ------------- ------------ --------
Net cash excluding lease liabilities is GBP1,476m (2021 half
year - GBP705m; 2021 year end -GBP1,901m).
8. Related parties
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note. Full details of the Group's other related
party relationships, transactions and balances are given in the
Group's financial statements for the 53 weeks ended 18 September
2021. There have been no material changes in these relationships in
the 24 weeks ended 5 March 2022 or up to the date of this report.
No related party transactions have taken place in the first 24
weeks of the current financial year that have materially affected
the financial position or the performance of the group during that
period.
9. Defined benefit pension schemes
Employee benefits assets primarily comprise the accounting
surplus of the Group's UK defined benefit scheme. At the end of the
period these were GBP942m (2021 half year: GBP531m). The increase
from GBP640m at the end of the last financial year was driven by a
reduction in scheme liabilities as a result of an increase in the
discount rate applied from 1.75% at the financial year end to 2.40%
at this half year.
10. Basis of preparation
Associated British Foods plc ('the Company') is a company
domiciled in the United Kingdom. The condensed consolidated interim
financial statements of the Company for the 24 weeks ended 5 March
2022 comprise those of the Company and its subsidiaries (together
referred to as 'the Group') and the Group's interests in joint
ventures and associates.
The consolidated financial statements of the Group for the 53
weeks ended 18 September 2021 are available upon request from the
Company's registered office at 10 Grosvenor Street, London, W1K 4QY
or at www.abf.co.uk.
The condensed consolidated interim financial statements have
been prepared in accordance with IAS 34 Interim Financial
Reporting. They do not include all of the information required for
full annual financial statements and should be read in conjunction
with the consolidated financial statements for the 53 weeks ended
18 September 2021.
Lower Group adjusted operating profit for the last two financial
years compared to 2018/19 was driven by closure of Primark stores
and subsequent trading restrictions because of COVID. All our
stores have been reopened for some time and almost all of them are
free of trading restrictions.
The events of the last two years demonstrated the importance of
sufficient financial resources and credit strength to meet
operational challenges. In November last year, S&P Global
announced they had assigned the Group an 'A' grade long-term issuer
credit rating. In February this year, the Group announced its
inaugural GBP400m public bond, due in 2034, further diversifying
its funding base.
At the half year, the Group had net cash before lease
liabilities of GBP1,476m compared to GBP705m at the half year last
year. In August 2020, a two-year extension to the Group's GBP1,088m
committed facility was negotiated extending its maturity to July
2023. Although we expect to replace this facility, as these plans
are not yet finalised, for the purpose of this going concern
assessment we have assumed this facility will not be available
after maturity.
The directors have reviewed a detailed cash flow forecast to the
end of the 2023 financial year. The directors reviewed the trading
of both the Food and Primark businesses in the base case and
applied a downside sensitivity and a reverse stress test. The
directors have a thorough understanding of the risks, sensitivities
and judgements included in these elements of the cash flow forecast
and have a high degree of confidence in these cash flows.
In the downside sensitivity, the two most significant challenges
are price inflation and the potential for future COVID trading
restrictions affecting Primark.
All businesses are facing significant supply-side inflationary
pressures in commodities and other raw materials, packaging,
labour, energy (gas and electricity) and logistics. Inflation has
been compounded by the Russian invasion of Ukraine. Actions are
being taken by the business to recover inflationary cost
increases.
The downside scenario assumes that approximately two thirds of
cost inflation in the Food businesses and Primark is not recovered
and that no mitigating actions are taken. It also assumes further
COVID trading restrictions reduce revenues across the Primark
estate by 25% for six months. This includes the key Christmas
trading period. Again we have assumed that no mitigating actions
are taken. It has also been assumed that there will be no further
assistance from national governments.
Under these sensitivities, the Group has a net cash position
(before lease liabilities) throughout the assessment period and
complies with all debt covenants.
The reverse stress test considers circumstances which could
exhaust the Group's cash resources during the assessment period.
Cost inflation would need to more than double, without any price
increases to customers or mitigating actions, before the cash
resources are exhausted.
Under the downside scenario, headroom throughout the period is
substantial, therefore the directors did not consider it necessary
to assess potential mitigating actions available to the Group. The
directors consider the likelihood of the headroom being exhausted
to be remote.
After making enquiries, the directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. For this reason,
they continue to adopt the going concern basis in preparing the
condensed consolidated interim financial statements.
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Operating Review. Note 26 on pages 186 to 197 of
the 2021 Annual Report provides details of the Group's policy on
managing its financial and commodity risks.
The 24 week period for the condensed consolidated interim
financial statements of the Company means that the second half of
the year is usually a 28 week period, and the two halves of the
reporting year are therefore not of equal length. For the Retail
segment, Christmas, falling in the first half of the year, is a
particularly important trading period. For the Sugar segment, the
balance sheet, and working capital in particular, is strongly
influenced by seasonal growth patterns for both sugar beet and
sugar cane, which vary significantly in the markets in which the
Group operates.
The condensed consolidated interim financial statements are
unaudited but have been subject to an independent review by the
auditor and were approved by the board of directors on 26 April
2022. They do not constitute statutory financial statements as
defined in section 434 of the Companies Act 2006. The comparative
figures for the 53 weeks ended 18 September 2021 have been abridged
from the Group's 2021 financial statements and are not the
Company's statutory financial statements for that period. Those
financial statements have been reported on by the Company's auditor
for that period and delivered to the Registrar of Companies. The
report of the auditor was unqualified, did not include a reference
to any matters to which the auditor drew attention by way of
emphasis without qualifying their report and did not contain a
statement under section 498(2) or (3) of the Companies Act
2006.
This Interim Results Announcement has been prepared solely to
provide additional information to shareholders as a body, to assess
the Group's strategies and the potential for those strategies to
succeed. This Interim Results Announcement should not be relied
upon by any other party or for any other purpose.
11. Significant accounting policies
Except where detailed otherwise, the accounting policies applied
by the Group in these condensed consolidated interim financial
statements are substantially the same as those applied by the Group
in its consolidated financial statements for the 53 weeks ended 18
September 2021 including for derivatives and current biological
assets, which are recognised in the balance sheet at fair value and
fair value less costs to sell, respectively. The methodology for
selecting assumptions underpinning the fair value calculations has
not changed since 18 September 2021.
In April 2021 the IFRS Interpretations Committee issued a final
agenda decision regarding configuration or customisation costs in a
cloud computing arrangement which provided additional guidance on
how to determine whether configuration or customisation expenditure
relating to cloud computing arrangements result in an intangible
asset. This agenda decision did not have a material impact on the
prior period or current results.
New accounting standards
The following accounting standards, amendments and
clarifications were adopted during the period and had no
significant impact on the Group:
-- Amendments to IFRS 4 Insurance Contracts - Extension of the Temporary Exemption
from Applying IFRS 9
-- Amendment to IFRS 16 Leases (Covid-19-Related Rent Concessions beyond 30 June
2021)
-- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark
Reform - Phase 2. Financial authorities have announced the timing of key interest
rate benchmark replacements such as LIBOR in the UK, the US and the EU and other
territories expected at the end of 2021, with remaining USD tenors expected
to cease in 2023. The Group is primarily exposed to USD LIBORs that will be
available until June 2023.
Accounting standards not yet applicable
The Group is assessing the impact of the following standards,
interpretations and amendments that are not yet effective. Where
already endorsed by the UK Endorsement Board (UKEB), these changes
will be adopted on the effective dates noted. Where not yet
endorsed by the UKEB, the adoption date is less certain:
-- Amendments to IFRS 3 Business Combinations effective 2023 financial year (not
yet endorsed by the UKEB)
-- Amendment to IFRS 9 Financial Instruments effective 2023 financial year (not
yet endorsed by the UKEB)
-- Annual Improvements to IFRS Standards 2018-2020 effective 2023 financial year
(not yet endorsed by the UKEB)
-- IFRS 17 Insurance Contracts effective 2023 financial year (not yet endorsed
by the UKEB)
-- Amendments to IAS 1 Presentation of Financial Statements: Classification of
Liabilities as Current or Non-current effective 2024 financial year (not yet
endorsed by the UKEB)
-- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement
2) effective 2024 financial year (not yet endorsed by the UKEB)
-- Definition of Accounting Estimates (Amendments to IAS 8) effective 2024 financial
year (not yet endorsed by the UKEB)
-- Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12) effective 2024 financial year (not yet endorsed by the
UKEB)
-- Property, Plant and Equipment - Proceeds before Intended Use (Amendments to
IAS 16) effective 2023 financial year (not yet endorsed by the UKEB)
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) effective
2023 financial year (not yet endorsed by the UKEB)
12. Accounting estimates and judgements
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates. In preparing the condensed
consolidated interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those applied to the consolidated financial statements for
the 53 weeks ended 18 September 2021.
13. Alternative performance measures
In reporting financial information, the Board uses various
alternative performance measures (APMs) which it believes provide
useful additional information for understanding the financial
performance and financial health of the Group. These APMs should be
considered in addition to IFRS measures and are not intended to be
a substitute for them. Since IFRS does not define APMs, they may
not be directly comparable to similar measures used by other
companies.
The Board also uses APMs to improve the comparability of
information between reporting periods and geographical units (such
as like-for-like sales) by adjusting for non-recurring or
uncontrollable factors which affect IFRS measures, to aid users in
understanding the Group's performance.
Consequently, the Board and management use APMs for performance
analysis, planning, reporting and incentive-setting.
Closest
equivalent
APM IFRS measure Definition/purpose Reconciliation/calculation
------------------ ------------- ---------------------------------------------- --------------------------
Like-for-like No direct The like-for-like sales metric enables Consistent with
sales equivalent measurement of the performance of the definition
our retail stores on a comparable given
year-on-year basis.
This measure represents the change
in sales at constant currency in our
retail stores adjusted for new stores,
closures and relocations. Refits,
extensions and downsizes are also
adjusted for if a store's retail square
footage changes by 10% or more. For
each change described above, a store's
sales are excluded from like-for-like
sales for one year.
No adjustments are made for disruption
during refits, extensions or downsizes
if a store's retail square footage
changes by less than 10%, for cannibalisation
by new stores, or for the timing of
national or bank holidays.
It is measured against comparable
trading days in each period.
------------------ ------------- ---------------------------------------------- --------------------------
Two year No direct The like-for-like sales metric expressed Consistent with
like-for-like equivalent over two years enables measurement the definition
sales of the performance of our retail stores given
compared to our experience in the
first half of 2020, which was before
any of the economic effects of COVID.
It is calculated as described above
for like-for-like sales, but with
2020 data as the comparator.
------------------ ------------- ---------------------------------------------- --------------------------
Three year No direct The like-for-like sales metric expressed Consistent with
like-for-like equivalent over three years enables measurement the definition
sales of the performance of our retail stores given
compared to our experience in 2019,
the last full financial year before
any of the economic effects of COVID.
It is calculated as described above
for like-for-like sales, but with
2019 data as the comparator.
------------------ ------------- ---------------------------------------------- --------------------------
Adjusted No direct Adjusted operating (profit) margin See note A
operating equivalent is adjusted operating profit as a
(profit) percentage of revenue.
margin
------------------ ------------- ---------------------------------------------- --------------------------
Adjusted Operating Adjusted operating profit is stated A reconciliation
operating profit before amortisation of non-operating of this measure
profit intangibles, transaction costs, amortisation is provided
of fair value adjustments made to on the face
acquired inventory, profits less losses of the condensed
on disposal of non-current assets consolidated
and exceptional items. income statement
Items defined above which arise in and by operating
the Group's joint ventures and associates segment in note
are also treated as adjusting items 1 of the interim
for the purposes of adjusted operating results announcement
profit.
================== ============= ============================================== ==========================
Adjusted Profit Adjusted profit before tax is stated A reconciliation
profit before before amortisation of non-operating of this measure
before tax intangibles, transaction costs, amortisation is provided
tax of fair value adjustments made to on the face
acquired inventory, profits less losses of the condensed
on disposal of non-current assets, consolidated
exceptional items and profits less income statement.
losses on sale and closure of businesses.
Items defined above which arise in
the Group's joint ventures and associates
are also treated as adjusting items
for the purposes of adjusted profit
before tax.
------------------ ------------- ---------------------------------------------- --------------------------
Adjusted Earnings Adjusted earnings per share is stated Reconciliation
earnings per share before amortisation of non-operating of this measure
per share intangibles, transaction costs, amortisation is provided
of fair value adjustments made to in note 4 of
acquired inventory, profits less losses the interim
on disposal of non-current assets, results announcement
exceptional items and profits less
losses on sale and closure of businesses
together with the related tax effect.
Items defined above which arise in
the Group's joint ventures and associates
are also treated as adjusting items
for the purposes of adjusted earnings
per share.
------------------ ------------- ---------------------------------------------- --------------------------
Exceptional No direct Exceptional items are items of income Exceptional
items equivalent and expenditure which are material items are included
and unusual in nature and are considered on the face
of such significance that they require of the condensed
separate disclosure on the face of consolidated
the income statement. income statement
with further
detail provided
in note 2 of
the interim
results announcement
================== ============= ============================================== ==========================
Constant Revenue Constant currency measures are derived See note B
currency and see by translating the relevant prior
adjusted period figure at current period average
operating exchange rates, except for countries
profit where CPI has escalated to extreme
(non-IFRS) levels, in which case actual exchange
measure rates are used. There are currently
two countries where the Group has
operations in this position - Argentina
and Venezuela.
------------------ ------------- ---------------------------------------------- --------------------------
Effective Income The effective tax rate is the tax Whilst the effective
tax rate tax expense charge for the period expressed as tax rate is
a percentage of profit before tax. not disclosed,
a reconciliation
of the tax charge
on profit before
tax at the UK
corporation
tax rate to
the actual tax
charge is provided
in note 3 of
the interim
results announcement
------------------ ------------- ---------------------------------------------- --------------------------
Adjusted No direct The adjusted effective tax rate is The tax impact
effective equivalent the tax charge for the period excluding of reconciling
tax rate tax on adjusting items expressed as items between
a percentage of adjusted profit before profit before
tax. tax and adjusted
profit before
tax is shown
in note 3 of
the interim
results announcement
------------------ ------------- ---------------------------------------------- --------------------------
Dividend No direct Dividend cover is the ratio of adjusted See note C
cover equivalent earnings per share to dividends per
share relating to the period.
------------------ ------------- ---------------------------------------------- --------------------------
Capital No direct Capital expenditure is a measure of See note D
expenditure equivalent investment each period in non-current
assets in existing businesses. It
comprises cash outflows from the purchase
of property, plant and equipment and
intangibles.
------------------ ------------- ---------------------------------------------- --------------------------
Gross investment No direct Gross investment is a measure of investment See note E
equivalent each period in non-current assets
of existing businesses and acquisitions
of new businesses. It includes capital
expenditure as well as cash outflows
from the purchase of subsidiaries,
joint ventures and associates, additional
shares in subsidiary undertakings
purchased from non-controlling interests
and other investments, as well as
net debt assumed in acquisitions.
------------------ ------------- ---------------------------------------------- --------------------------
Net cash/debt No direct This measure comprises cash, cash A reconciliation
before equivalent equivalents and overdrafts, current of this measure
lease liabilities asset investments and loans. is shown in
note 7 of the
interim results
announcement
================== ============= ============================================== ==========================
Net cash/debt No direct This measure comprises cash, cash A reconciliation
including equivalent equivalents and overdrafts, current of this measure
lease liabilities asset investments, loans and lease is shown in
liabilities. note 7 of the
interim results
announcement
------------------ ------------- ---------------------------------------------- --------------------------
Adjusted See Adjusted Adjusted EBITDA is stated before depreciation, See note F
EBITDA operating amortisation and impairment charged
profit to adjusted operating profit.
(non-IFRS)
measure
------------------ ------------- ---------------------------------------------- --------------------------
Financial No direct Financial leverage is the ratio of See note F
leverage equivalent net cash/debt including lease liabilities
ratio to adjusted EBITDA based on the last
12 months rolling adjusted EBITDA.
------------------ ------------- ---------------------------------------------- --------------------------
(Average) No direct Capital employed is derived from the Consistent with
capital equivalent management balance sheet and does the definition
employed not reconcile directly to the statutory given
balance sheet. All elements of capital
employed are calculated in accordance
with Adopted IFRS.
Average capital employed for each
segment and the Group is calculated
by averaging the capital employed
for each period of the financial year
based on the reporting calendar of
each business.
------------------ ------------- ---------------------------------------------- --------------------------
Return No direct The return on (average) capital employed Consistent with
on (average) equivalent measure divides adjusted operating the definition
capital profit by average capital employed. given
employed
(Average) No direct Working capital is derived from the Consistent with
working equivalent management balance sheet and does the definition
capital not reconcile directly to the statutory given
balance sheet. All elements of working
capital are calculated in accordance
with Adopted IFRS.
Average working capital for each segment
and the Group is calculated by averaging
the working capital for each period
of the financial year based on the
reporting calendar of each business.
------------------ ------------- ---------------------------------------------- --------------------------
(Average) No direct This measure expresses (average) working Consistent with
working equivalent capital as a percentage of revenue. the
capital definition given
as a percentage
of revenue
------------------ ------------- ---------------------------------------------- --------------------------
Note A
Central
and disposed
Grocery Sugar Agriculture Ingredients Retail businesses Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- ------- ----- ----------- ----------- ------ ------------- -----
24 weeks ended 5 March 2022
External revenue from continuing
businesses 1,821 914 809 798 3,540 - 7,882
Adjusted operating profit 175 77 15 63 414 (38) 706
Adjusted operating margin % 9.6% 8.4% 1.9% 7.9% 11.7% 9.0%
24 weeks ended 27 February 2021
External revenue from continuing
businesses 1,834 763 746 735 2,232 3 6,313
Adjusted operating profit 199 66 19 78 43 (36) 369
Adjusted operating margin % 10.9% 8.7% 2.5% 10.6% 1.9% 5.8%
--------------------------------- ======= ===== =========== =========== ====== ============= =====
Note B
Disposed
Grocery Sugar Agriculture Ingredients Retail businesses Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- ------- ----- ----------- ----------- ------ ----------- -----
24 weeks ended 5 March 2022
External revenue from continuing
businesses
at actual rates 1,821 914 809 798 3,540 - 7,882
24 weeks ended 27 February 2021
External revenue from continuing
businesses
at actual rates 1,834 763 746 735 2,232 3 6,313
Impact of foreign exchange (41) 4 (2) (21) (77) - (137)
--------------------------------- ------- ----- ----------- ----------- ------ ----------- -----
External revenue from continuing
businesses
at constant currency 1,793 767 744 714 2,155 3 6,176
% change at constant currency +2% +19% +9% +12% +64% +28%
--------------------------------- ------- ----- ----------- ----------- ------ ----------- -----
Central
and disposed
Grocery Sugar Agriculture Ingredients Retail businesses Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------- --------- ----- ----------- ----------- ------ ------------- -----
24 weeks ended 5 March 2022
Adjusted operating profit at actual
rates 175 77 15 63 414 (38) 706
24 weeks ended 27 February 2021
Adjusted operating profit at actual
rates 199 66 19 78 43 (36) 369
Impact of foreign exchange (7) 5 (1) (2) 4 (1) (2)
-------------------------------------- --------- ----- ----------- ----------- ------ ------------- -----
Adjusted operating profit at constant
currency 192 71 18 76 47 (37) 367
% change at constant currency * 9% +8% * 17% * 17% +781% +92%
-------------------------------------- --------- ----- ----------- ----------- ------ ------------- -----
Note C
24 weeks 24 weeks 53 weeks
ended ended ended
5 March 27 February 18 September
2022 2021 2021
pence pence pence
--------------------------------------------------------- ======== ============ =============
Adjusted earnings per share (pence) 63.8 25.1 80.1
Adjustment to reflect the impact of the future repayment (6.6) -
of GBP79m job retention monies received in the first
half taxed at the adjusted effective tax rate (pence) -
--------------------------------------------------------- -------- ------------ -------------
63.8 18.5 80.1
Dividends relating to the year (pence) - excluding
special dividend 13.8 6.2 26.7
--------------------------------------------------------- -------- ------------ -------------
Dividend cover 5 3 3
--------------------------------------------------------- -------- ------------ -------------
Note D
24 weeks 24 weeks 53 weeks
ended ended ended
5 March 27 February 18 September
2022 2021 2021
From the cash flow statement GBPm GBPm GBPm
------------------------------------------ ======== ============ =============
Purchase of property, plant and equipment 272 263 551
Purchase of intangibles 64 44 76
------------------------------------------ -------- ------------ -------------
336 307 627
------------------------------------------ -------- ------------ -------------
Note E
24 weeks 24 weeks 53 weeks
ended ended ended
5 March 27 February 18 September
2022 2021 2021
From the cash flow statement GBPm GBPm GBPm
-------------------------------------------------------- ======== ============ =============
Purchase of property, plant and equipment 272 263 551
Purchase of intangibles 64 44 76
Purchase of subsidiaries, joint ventures and associates 114 39 57
Purchase of shares in subsidiary undertaking from
non-controlling interests - 23 23
Purchase of other investments - 13 14
-------------------------------------------------------- -------- ------------ -------------
450 382 721
-------------------------------------------------------- -------- ------------ -------------
Note F
24 weeks 24 weeks 53 weeks
ended ended ended
5 March 27 February 18 September
2022 2021 2021
GBPm GBPm GBPm
================================================= ======== ============ =============
Adjusted operating profit 706 369 1,011
Charged to adjusted operating profit:
Depreciation of property, plant and equipment 245 265 535
Amortisation of operating intangibles 14 11 26
Depreciation of right-of-use assets and non-cash
lease adjustments 128 144 288
Adjusted EBITDA 1,093 789 1,860
Net debt including lease liabilities (1,665) (2,715) (1,380)
Financial leverage ratio (based on the last 12
months rolling adjusted EBITDA) 0.8 1.7 0.7
14. Subsequent events
In addition to the planned repayment of $100 million of private
placement debt during the period, two further planned repayments of
$100 million and GBP80 million have been made since the end of the
period.
Cautionary statements
This report contains forward-looking statements. These have been
made by the directors in good faith based on the information
available to them up to the time of their approval of this report.
The directors can give no assurance that these expectations will
prove to have been correct. Due to the inherent uncertainties,
including both economic and business risk factors, underlying such
forward-looking information, actual results may differ materially
from those expressed or implied by these forward-looking
statements. The directors undertake no obligation to update any
forward-looking statements whether as a result of new information,
future events or otherwise.
Responsibility statement
The Interim Results Announcement complies with the Disclosure
and Transparency Rules ('the DTR') of the UK's Financial Conduct
Authority in respect of the requirement to produce a half-yearly
financial report.
The directors confirm that to the best of their knowledge:
this financial information has been prepared in accordance with
UK-adopted International Accounting Standard 34 Interim Financial
Reporting;
this Interim Results Announcement includes a fair review of the
important events during the first half and their impact on the
financial information, and a description of the principal risks and
uncertainties for the remaining half of the year as required by DTR
4.2.7R; and
this Interim Results Announcement includes a fair review of the
disclosure of related party transactions and changes therein as
required by DTR 4.2.8R.
On behalf of the board
Michael McLintock George Weston John Bason
Chairman Chief Executive Finance Director
26 April 2022
Independent review report to Associated British Foods plc
Conclusion
We have been engaged by the Company to review the condensed set
of financial statements in the Interim Results Announcement for the
24 week period ended 5 March 2022 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet,
the condensed consolidated cash flow statement, the condensed
consolidated statement of changes in equity and the related
explanatory notes. We have read the other information contained in
the Interim Results Announcement and considered whether it contains
any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed consolidated interim
financial statements in the Interim Results Announcement for the 24
week period ended 5 March 2022 are not prepared, in all material
respects, in accordance with UK-adopted International Accounting
Standard 34 Interim Financial Reporting and the Disclosure Guidance
and Transparency Rules of the United Kingdom's Financial Conduct
Authority.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements 2410 (UK and Ireland) Review of
Interim Financial information performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board. A review of
interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 10, the annual financial statements of the
Group will be prepared in accordance with UK-adopted international
accounting standards. The condensed set of financial statements
included in this Interim Results Announcement has been prepared in
accordance with UK-adopted International Accounting Standard 34
Interim Financial Reporting.
Responsibilities of the directors
The directors are responsible for preparing the Interim Results
Announcement in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
Auditor's responsibilities for the review of the financial
information
In reviewing the Interim Results Announcement, we are
responsible for expressing to the Company a conclusion on the
condensed set of financial statements in the Interim Results
Announcement. Our conclusion is based on procedures that are less
extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report.
Use of our report
This report is made solely to the company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) Review of Interim Financial information
performed by the Independent Auditor of the Entity issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
Birmingham
26 April 2022
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END
IR KZGZDLKMGZZM
(END) Dow Jones Newswires
April 26, 2022 02:01 ET (06:01 GMT)
Grafico Azioni Associated British Foods (LSE:ABF)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Associated British Foods (LSE:ABF)
Storico
Da Apr 2023 a Apr 2024
