ABF saw a significant profit increase, but sugar pricing issues loom.
- The company’s pre-tax profit rose by 33% to £1.9bn this year.
- Grocery and ingredients sales also showed notable growth.
- European sugar pricing cuts could impact profits significantly in 2025.
- ABF remains optimistic for recovery in 2026 despite these challenges.
Associated British Foods (ABF), a name synonymous with brands like Kingsmill and Twinings, has reported a substantial increase in its financial performance over the past year, with adjusted pre-tax profits climbing 33% to £1.9 billion. This was driven largely by the company’s strategic marketing investments and improved margins across their grocery sector, which saw operating profits rise by 17% and overall sales by 4%, reflecting ABF’s robust commercial execution and product innovation.
Despite these successes, a looming challenge is the reduction in European sugar pricing expected to take a significant toll on the company’s profits in 2025. The British Sugar unit, a crucial part of ABF, anticipates that this pricing adjustment will see its adjusted operating profit fall to between £50 million and £75 million next year. However, ABF projects a rebound in 2026, attributing this to better beet prices and a more balanced market supply and demand.
In the ingredients sector, the company experienced a 2% growth in sales and a 12% increase in operating profits, spurred by the performance of yeast and bakery ingredients. ABF has expressed confidence in maintaining this trajectory through continued investment in specialty ingredients and enhanced marketing strategies, which are pivotal to sustaining growth momentum.
ABF’s CEO, George Weston, remarked that their food businesses exhibited both growth and profitability, an outcome of lowered input costs and strategic marketing efforts. Looking to the future, the firm is committed to sustaining this momentum through ongoing investments and disciplined capital allocation aimed at growth opportunities and sustainability initiatives, aligning with their long-term investment strategies.
ABF anticipates navigating through sugar pricing challenges with strategic foresight and remains confident in its long-term growth and profitability.
