AB Foods profits rise
BSE and green £ revaluations took the shine off interim results for Garry Westons Associated British Foods, owner of AB Nutrition, British Sugar and Allied Grain.
In the animal feeds division – encompassing such household names as J Bibby, KW Agriculture and Trident Feeds – AB Nutrition suffered a 25% drop in profits, due to reduced demand in the wake of BSE and competition from cheaper imports.
British Sugar also saw operating profits fall in the six months to Mar 1, down £3m to £84m on total sales of £389m.
"Profits were adversely affected by changes to the green £, which cost £6m, though this years record crop size of 1.477m tonnes will mitigate the effect in the second half," said executive chairman, Mr Weston. Sugar sales volumes were also under pressure in the first half, though the effect of this was offset by efficiency improvements.
And while cereal processing companies (including Allied Mills) showed some improvement on year-ago levels, currency factors, which have pushed down grain and oilseed prices, adversely affected the results of the commodity trading operation.
Overall, ABF saw profits rise by just £3m to £201m. "The adverse effects resulting from the strength of sterling reduced profits by £11m," said Mr Weston. "The reduction results from the lower selling prices and margins following the realignment of the green £, competition from lower priced imports and the loss of exports."