Profits up at ABF with improved outlook for ag sector

Associated British Foods (ABF) is expecting its agricultural businesses to “move forward” as markets improve, after it made a number of acquisitions during the past two years.

The ABF group made a pre-tax profit of £881m in the 24 weeks ending 2 March 2024, according to its interim accounts, with group revenue up to total £9.73bn.

This allowed it to increase its interim dividend payment by 46% to 20.7p a share.

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The multinational group has either full or part ownership of a large volume of businesses within the food sector, including British Sugar, Frontier, ABN, KW Feeds, Kite Consulting, Vivergo Fuels and baker Kingsmill, as well as retail businesses such as Primark.

George Weston, ABF’s chief executive, said: “Improvements to the group’s operational performance, driven by the investments and strong execution over the last few years, are now becoming visible. Group profit margins are recovering accordingly to more normal levels.

“Looking ahead, we continue to invest with discipline to build further sustainable growth. Geopolitical risks remain, of course, and the consumer has yet to fully emerge from cost-of-living pressures. But the group is well positioned to deliver good returns to shareholders.”

Its dairy businesses performed well during the 24-week period, including National Milk Records, which it acquired last year.

However, the interim accounts did note that there had been a decline in profits at Frontier over the winter period as wet weather reduced demand for its services.

ABF’s compound feed businesses in the UK and China faced weaker demand as a result of reduced herd sizes, but the poultry feed market was more stable.