LONDON, ENGLAND — Associated British Foods (ABF) reported on Nov. 5 that adjusted earnings per share for the year were up 13% to 98.9p ($1.59), and that its agriculture division achieved record profits. Revenue for the group was up 9% to £13.3 billion.
“I am delighted to report that the group has again delivered a great set of results. Grocery was much improved, Agriculture achieved record profits, Sugar was in line with our expectations and it was a remarkable year for Primark,” said George Weston, ABF chief executive.
Agriculture had a record year with revenues and profit well ahead of last year driven by a strong performance across the U.K. businesses and international growth for AB Vista, ABF said. The company reported an 11% increase in revenue for the division to £1.41 billion with adjusted operating profit of £47 million.
Frontier performed well in a year in which the supply of U.K. grain was poor and of variable quality. A higher volume of wheat imports increased the complexity and cost of the U.K. cereal supply chain which, together with global price volatility throughout the year, resulted in strong earnings from grain trading. A wet autumn in 2012 lowered wheat plantings thereby reducing demand for fertilizer and crop protection products.
However, the cool spring and warm summer of 2013 provided good growing conditions for autumn planted crops and spring cereals creating a better harvest potential than was previously expected.
ABF’s feed business, AB Connect, saw strong demand for ruminant feeds, and poultry feed volumes grew in line with increased demand from U.K. consumers. The international feed enzyme and micro-ingredients business, AB Vista, continued to grow faster than the market, particularly in North America with the success of the company’s Quantum Blue phytase enzyme, sales of which were up more than 30% on last year. The business also became the second largest global supplier of betaine, a functional micro-ingredient extracted from sugar beet molasses.
The U.K. livestock sector experienced a mixed year. Dairy farmers saw milk price increases being largely offset by higher costs and poor quality and quantity of forage. Consolidation in the poultry market depressed farm margins and the pig market continued its slow recovery from several years of low margins and high raw material costs.
Premier Nutrition traded well, particularly in U.K. poultry, and maintained its market-leading position in U.K. starter feeds. Further progress was achieved in its developing markets in Asia, and Central and Eastern Europe. AB Sustain’s beef and dairy farm carbon footprint models have been improved further and were recertified by The Carbon Trust.
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