28th Feb 2005 07:00
Associated British Foods PLC28 February 2005 28 February 2005 Associated British Foods plc Pre Close Period Trading Update Associated British Foods plc issues the following update prior to entering theclose period for its interim results to 5 March 2005, which are scheduled to beannounced on 19 April 2005. The Chairman's statement at the Annual General Meeting on 10 December 2004 saidthat trading in our established businesses in the early part of the year hadbeen satisfactorily ahead of the previous year and a positive contribution wasexpected from the acquisitions made during the last financial year. Thestatement also commented that the company is set for further progress and thiscontinues to be the case, in line with our expectations at the beginning of thefinancial year. The main acquisitions in the last financial year were the international yeast,bakery ingredients and US herbs and spices businesses from Burns Philp, thepremium canola oil brand, Capullo, in Mexico and the Billington's sugar businessin the UK. Each of these businesses has performed in line with ourexpectations. In Grocery, Allied Bakeries in the UK benefited from growth in Kingsmill andmuch improved operational efficiencies in its frozen bakery operation,Speedibake. In the US, the improvement in trading at ACH has continued and theintegration of the herbs and spices and consumer yeast businesses are welladvanced and expect to be complete by early summer. There was a strongcontribution from Capullo in Mexico. Underlying trading in Australia continuedto be adversely affected by competitor pressure in the bread market. Twiningsand Ovaltine achieved good sales growth, especially in Asia for Ovaltine. British Sugar in the UK has had a good campaign and the crop is forecast at1.37m tonnes. However, profit has been affected by the relative weakness of theeuro against last year and higher energy costs. Profit benefited from theintroduction of the EU sugar regime in Poland, as expected, and higher volumesin China. At AB Mauri the new organisation is well established. Although yeast pricinghas remained weak in North America and Turkey and higher molasses costs haveaffected profits in a number of countries, the operations in South America andEastern Asia performed strongly. The integration of the bakery ingredientsbusinesses made good progress. Primark has continued to trade well and like-for-like sales growth is expectedto be around 6%, similar to that achieved in the last full year. Two newstores were opened in the first half of the year, and one small store closed,and extensions were completed in three stores. The total number of stores isnow 121 with 2.4 million sq ft of selling space. We recently announced theacquisition of six new stores from the administrators of the Allders group, withcompletion subject to landlord consent where required, and these will add 0.3million sq ft of selling space and are expected to open in the autumn of thisyear. FRS 17 was adopted in the financial statements for the year ended 18 September2004. Notes 1 and 2 outline the restatement of the profit and loss account andsegmental analyses for the period ended 28 February 2004. For further enquiries please contact:Associated British Foods John Bason, Finance Director Tel: 020 7399 6500Citigate Dewe Rogerson Jonathan Clare, Chris Barrie, Sara Batchelor Tel: 020 7638 9571 NOTES 1) FRS17 - Retirement Benefits was adopted in the financial statements forthe year ended 18 September 2004. Adoption of this standard has the effect ofreducing the adjusted operating profit and adjusted profit before tax for theperiod ended 28 February 2004 by £11m and £6m respectively. Adjusted earningsare reduced by £4m. 24 weeks Ended 28 February 2004 £mTurnover of the group including its share of joint ventures 2,380Less share of turnover of joint ventures (8)Group turnover 2,372 Operating costs (2,187)Group operating profit 185 Share of operating results of - joint ventures 6 - associates 2Total operating profit 193 Operating profit before amortisation of goodwill 213Amortisation of goodwill (20) Profits less losses on sale of fixed assets (1)Profits less losses on sale of businesses 8Investment income 24 Profit on ordinary activities before interest 224 Interest payable 10)Other financial income 5Profit on ordinary activities before taxation 219 Adjusted profit before taxation 232Profits less losses on sale of fixed assets (1)Profits less losses on sale of businesses 8Amortisation of goodwill (20) Tax on profit on ordinary activities (63)Profit on ordinary activities after taxation 156 Minority interests - equity -Profit for the financial period 156 Dividends - first interim (41) - second -interimTransfer to reserves 115 Basic and diluted earnings per ordinary share 19.8pAdjusted earnings per ordinary share 20.9p 2) The composition of our geographic segments was revised in the financial statements for the year ended 18 September 2004 to reflect the increasingly international breadth of our businesses. The impact of these changes on the segmental results for the period ended 28 February 2004, together with the impact of adopting FRS 17 as described in Note 1, are shown below: Analysis by geography as previously reported restated sales operating capital sales operating capital profit employed profit employed £m £m £m £m £m £mEuropean Union 1,496 161 1,478 United Kingdom 1,346 140 1,366Australia & New 317 10 243 Rest of Europe 250 21 196ZealandNorth America 386 33 182 The Americas 386 33 184Elsewhere 153 8 151 Australia, Asia & Rest 387 15 315 of WorldInter company sales (18) - - Inter company sales (35) - -Pension credit - 8 - 2,334 220 2,054 2,334 209 2,061Businesses Businesses disposed:disposed:European Union 20 - - United Kingdom 20 - -Australia & New 14 - - Rest of Europe 4 - -ZealandNorth America - - - The Americas - - -Elsewhere 4 4 - Australia, Asia & Rest 14 4 - of WorldPension credit - - - 2,372 224 2,054 2,372 213 2,061Amortisation of - (20) - Amortisation of - (20) -goodwill goodwill 2,372 204 2,054 2,372 193 2,061 The impact of the adoption of FRS 17 on the segmental analysis by business isshown below: Analysis by business as previously reported restated operating capital operating capital profit employed profit employed £m £m £m £mGrocery 71 740 Grocery 70 740Primary food & 85 904 Primary food & 83 906agriculture agricultureIngredients 15 125 Ingredients 15 127Retail 50 317 Retail 50 317Central (9) (32) Central (9) (29)Pension credit 8 - 220 2,054 209 2,061Businesses Businesses disposed:disposed:Grocery - - Grocery - -Primary food & 4 - Primary food & 4 -agriculture agriculturePackaging - - Packaging - -Pension credit - - 224 2,054 213 2,061Amortisation of (20) - Amortisation of (20) -goodwill goodwill 204 2,054 193 2,061 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AB Foods