ABF reports a strong financial year with notable profit increases despite future challenges in sugar pricing.
- ABF’s adjusted pre-tax profit surged by 33% to £1.9 billion, highlighting significant growth.
- Grocery sales and profits saw an increase attributed to strong margins and marketing investments.
- The company’s ingredients division experienced modest sales growth, driven by yeast and bakery ingredients.
- A decline in European sugar pricing may significantly impact ABF’s sugar business profitability in 2025.
ABF, the parent company of brands like Kingsmill, has reported a significant boost in profits for the financial year ending September 14. The company’s adjusted pre-tax profit showed a remarkable increase of 33%, reaching £1.9 billion. This growth was largely driven by a 17% rise in grocery-adjusted operating profit, emphasizing improved margins and increased marketing investments.
Grocery sales reported a 4% growth, reflecting the company’s strategic focus on marketing and commercial execution. According to ABF, these efforts have led to enhanced profitability and a robust performance from its food businesses. This aligns with the firm’s initiative to adapt to easing input costs and capitalize on innovative product offerings.
In the ingredients division, ABF achieved a 2% increase in sales, supported by a 12% rise in adjusted operating profit. The success here was predominantly fueled by strong performances in yeast and bakery ingredients. Additionally, sugar sales and profits were noted to be significantly ahead compared to the previous year, showcasing resilience in these sectors.
However, the company is preparing for a notable challenge ahead, as reductions in European sugar pricing are projected to significantly affect its sugar business’s profitability in 2025. ABF anticipates that the sugar segment’s operating profit could decrease to a range between £50 million and £75 million due to these price adjustments.
Despite this challenge, ABF remains optimistically strategic about the future. The company expects a recovery in profitability by 2026, aided by lower contracted beet prices and a market rebalancing of supply and demand. Additionally, strong cash flow generation supports disciplined capital allocation towards promising growth opportunities and sustainability projects, underscoring a stable path forward.
ABF remains resilient with strategic positioning and growth investments despite foreseeable market challenges.
