Weak pound boosts Associated British Foods

Associated British Foods' revenue from continuing operations for the 16 weeks ended 7 January was 10% up on a year ago at constant currency, with good growth delivered by all of its businesses.

As a result of the weakening of sterling in late summer last year, sales from continuing operations at actual exchange rates were strongly ahead with a 22% increase.

Sales at Primark were up 11% on a year ago at constant currency driven by increased retail selling space. Sales were 22% ahead of last time at actual exchange rates. Last year was a 53-week year for Primark and as a result, this 16 week period started one week later than last year.

On a comparable week basis, total retail sales at constant currency were 12% ahead and 23% ahead at actual exchange rates.

The increase in average retail selling space in this 16 week period, compared with the same period last year, was 12%.

The UK performed well. Like-for-like sales for the period were good and market share increased reflecting the strength of our consumer offering. Like-for-like sales for the group were held back by declines, albeit smaller than last year, in Germany and the Netherlands, the latter particularly affected by the rapid increase in selling space.

AB Sugar revenue from continuing operations was 22% ahead of last year on a comparable basis at constant exchange rates. At actual exchange rates revenue was 38% ahead. Higher sugar prices, increased production in Africa, and further benefit from the performance improvement programme delivered a substantial increase in profit.

Grocery made further margin progress. Twinings continued to achieve strong sales growth with particularly good performances in the UK, North America and Australia, and Ovaltine performed well in Asia. Continuing the momentum of last year, margins at George Weston Foods in Australia were much improved. Allied Bakeries volumes remained strong but pricing and margins remain challenging.

The group says its outlook is unchanged with progress expected in adjusted operating profit and adjusted earnings for the group for the full year.