AB Foods Regulatory News (ABF)

17 Jan 2008 07:00

Associated British Foods PLC17 January 2008 17 January 2008 Associated British Foods plc Interim management statement Associated British Foods plc today issues its first interim management statementin accordance with the requirements of the UK Listing Authority's Disclosure andTransparency rules. The period covered is the 16 weeks to 5 January 2008. Highlights • Group revenue up 13% • Sugar developments - £100m investment in Mali announced by Illovo - investment in beet sugar in north east China, now 11 factories • Primark total sales ahead 26% Trading performance Group revenue for the first 16 weeks was 13% ahead of the same period last yeardriven by strong growth from each of Primark, Agriculture, Grocery andIngredients. This was marginally offset by lower revenues from Sugar. Sugar revenues were 12% lower than last year largely because, as previouslyreported, the equivalent period last year benefited from the early shipment ofexport sales from the UK. Profit in the UK will be lower than last year, mainlyas a result of further effects of the EU sugar regime restructuring, but alsohigher energy costs and a smaller crop. Poland has had a record crop but profitwill also suffer from regime changes. The recent strengthening of the euro willbenefit both businesses. Sugar production in southern Africa will be lower thanexpected as high rainfall levels have made it impossible to harvest allavailable cane. This has particularly affected South Africa and Zambia. Illovohas announced an investment of £100m for the construction, in Mali, of a newsugar mill with an ethanol and electricity co-generation unit, in which it willhave a 70% stake. It will manage the agricultural development to produce thesugar cane required to supply this new facility. A total of 11 sugar beetfactories have now been acquired in north east China and the campaign isprogressing well. Our agriculture businesses made a strong start to the year with revenue up 20%.Frontier benefited from its operations in the wheat market and UK animal feedsperformed well. Sales at Primark were 26% ahead of last year reflecting the increase in retailselling space and strong like-for-like sales growth. Christmas trading wasahead of our expectations. At 5 January 2008 there were 173 stores with 5million sq ft of selling space. Since last year end we have opened new storesin Jerez and Madrid, bringing the number of stores in Spain to four, a new storein Cork and larger stores in Tralee and Brighton which replaced smaller storesthere. A further four stores in Spain are planned to open in April. Grocery revenue was 15% ahead with good sales growth from Twinings Ovaltine anda continuation of the improvement seen in the second half last year from AlliedBakeries. Wheat prices remain high both in the UK and Australia but have nowbeen successfully recovered through pricing. Trading by the new world foodsbusiness, which combines the Patak's and Blue Dragon brands, is encouraging. Asexpected, the sharp increases in corn and soy oil costs in the US have led tomargin pressure and lower volumes at ACH, but price increases have been made toimprove profitability. Ingredients revenue was 16% ahead. We are investing £50m in additional yeastand yeast extract capacity in north east China and £17m in enzyme capacityexpansion in Finland. Cashflow for the period and the group's net debt are in line with expectationsalthough working capital is higher than forecast as a result of the impact ofhigher commodity prices on stock values and volumes. Trading outlook Trading in the current year has been fully up to our expectations. Aspreviously highlighted, reform of the European Union sugar regime will have alarge negative effect on this year's profit. However, we continue to expectprofits in the rest of the group to show good progress despite volatility insome commodity prices. For further enquiries please contact: Associated British FoodsJohn Bason, Finance Director Tel: 020 7399 6500 Citigate Dewe RogersonJonathan Clare, Chris Barrie, Hannah Seward Tel: 020 7638 9571 This information is provided by RNS The company news service from the London Stock Exchange