Associated British Foods (ABF) has reported a 23% rise in its revenue growth to £3.5 billion across its entire food business, despite “significant cost pressures.”
Across grocery, the Twinings and Kingsmill parent company saw a 14% rise to £1.3bn, while its agriculture revenue rose by 19%.
ABF’s sugar and ingredients sectors saw the highest levels of growth in comparison to the the 16 weeks to 7 January 2022, with sugar increasing by 31% and a 36% rise across ingredients.
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The food processing company said the aggregate revenue increase was “primarily driven by price actions to recover significant input cost inflation” in its grocery, ingredients and agriculture businesses.
It said that while cost inflation is “becoming less volitile and recently some commodity costs have come down”, all of its businesses “continue to work hard to restore margins which have been and remain under pressure.”
In grocery, ABF said inflation in input costs continued to run ahead of pricing to recover margins, while it continues to see some erosion of adjusted operating profit margin for the full year.
For AB Sugar, UK production from its 2022/2023 campaign is expected to be 0.74m tonnes, lower than its previous forecast of 0.9m tonnes.
It has attributed this difference to lower beet sugar yields, following adverse weather conditions and as a result, its profitability at British Sugar will also be lower than expected.
However, its ingredients business “performed very strongly” and ABF now expects full year operating profit to be ahead of last year.
This comes as ABF revealed a £500 million share buyback scheme in November, following a strong recovery in trade.
The first tranche of the programme will take place today in the sum of £250 million, with it anticipating an end date of on or before 28 April 2023.
