Highlights
Group trading in line with expectations, outlook unchanged
Revenue increases at Food demonstrate ongoing price actions to date
Recovery of Grocery margin remains on target for next year
Strong trading at Sugar despite production disruption at Illovo this quarter
up to 25 stores in the northwest
wider product range offered to satisfy unfulfilled demand
builds on enhanced digital capability
expected to drive higher footfall and incremental sales in stores
Conference call
There will be an analyst and investor conference call at 8.30 BST today with
Trading performance
The following table sets out revenues by business segment for the third quarter of the financial year and for year to date. For
Third quarter GBPm Change at constant currency Year to date GBPm Change at constant currency
Grocery 932 +4% 2,753 +3%
Sugar 457 +7% 1,371 +15%
Agriculture 441 +10% 1,250 +9%
Ingredients 489 +24% 1,287 +16%
Total Food 2,319 +10% 6,661 +9%
Retail 1,727 +81% 5,267 +69%
Group 4,046 +32% 11,928 +29%
Group revenue for the quarter increased by 32%. Sales in our Food businesses increased 10% which reflected price actions to recover input cost inflation and volume increases in Ingredients. All
Sales and adjusted operating profit in the period were in line with our expectations. Our full year outlook remains unchanged with significant progress expected in adjusted operating profit and adjusted earnings per share for the Group.
References to growth in the following commentary are based on constant currency.
Grocery
Revenue growth picked up in the third quarter and was 4% ahead of last year. Sales benefited from price increases implemented earlier this year and further pricing action is underway. We continue to expect recovery in the margin run-rate in our next financial year.
Twinings sales declined marginally with a return to more normal levels of retail demand after the COVID lockdowns last year, partially offset by successful new product launches. Ovaltine sales were ahead with continued strong performance in
Allied Bakeries sales were ahead of the same period last year but higher input costs continued to adversely affect margins. Westmill benefited from the continued improvement in restaurant and take-away trade sales. Sales at Jordans Dorset Ryvita continued to progress.
Revenue growth at ACH was strong in the quarter with the benefit of price actions taken over the last year more than offsetting a decline in the US retail yeast volumes from COVID-elevated levels.
Sugar
AB Sugar revenue for the quarter was 7% ahead of last year. British Sugar's energy business sales prices were strong and Azucarera benefited from higher sugar and co-product prices. Illovo volumes in the quarter were held back with a later start to the new production season as a result of significant disruption from heavy rains. Sugar production in
The re-commissioning of our Vivergo bioethanol plant is progressing although production volumes are being held back by delays in delivery of some critical equipment. Current commodity prices and costs are delivering the expected margins.
Looking ahead we continue to expect European sugar demand to be in excess of production with production in 2021/22 only slightly higher than the prior year with a lower crop area offset by a recovery in yields to more normal levels. World sugar prices are also expected to remain strong.
Agriculture
Sales at Frontier were ahead of last year predominantly due to the strengthening of agricultural commodity prices and strong demand for crop protection products in the spring as farmers looked to maximise yields whilst grain prices are at record highs. AB Vista, our international feed enzymes business, was ahead of the prior year due to growth in
Ingredients
Revenue in the third quarter was strongly ahead of last year driven by both AB Mauri and
Although revenue growth for AB Mauri in this period was strong, margin continued to be impacted by the timing of customer price actions. Sales at
Retail
All
Trading in the
Sales in the quarter in Continental Europe were 106% ahead of last year and 7% above the comparable period three years ago with a 20% increase in retail selling space and like-for-like sales down 15%. Total sales in the US in the quarter were 34% ahead of pre-COVID levels with the benefit of new store openings.
The return of tourism and more office working combined with an improvement in the weather across all our markets was reflected in a strong customer reaction to our fashion ranges. Our spring/summer women's fashion ranges were well received with their focus on brightly coloured dresses, heels and blouses. Sales of luggage and holiday essentials such as swimwear, sliders and beach towels strengthened over the quarter as customers looked to holiday travel and leisure activities. Licensed product remained in great demand. Lilo & Stitch proved to be one of the top performing ranges from our ongoing partnership with
Retail selling space has increased by a net 0.3 million sq ft since the beginning of the financial year and at the end of the period we were trading from 403 stores and 17.1 million sq ft of retail selling space, compared to 16.7 million sq ft a year ago. Since the half year, an enthusiastic customer reception greeted both our newly opened flagship store in
We continue to transform
We now plan to enhance the customer journey even further with the
The Click & Collect service will build to offer customers some 2,000 options across clothing, accessories and lifestyle products, which will cater for a broad range of family needs from furnishing a nursery to clothing children of all ages. Around 40% of these options will be exclusive to Click & Collect. The expansion of the offering will be particularly attractive for our customers who do not regularly shop in our larger stores. Our average size stores are only able to stock a limited range and for these customers the number of options available to them will broadly double, increasing even more for customers of our small stores. This trial will enable us to provide more fashion, licence and lifestyle products to more customers and more often. In store collection will be available from designated areas, designed to be welcoming and situated in the heart of the store.
Click & Collect orders will be processed and dispatched to store from a dedicated
For further information please contact:
Tel: 020 7399 6545
Tel: 020 7638 9571
Notes:
Definitions of the alternative performance measures referred to in this announcement can be found in note 30 of our Annual Report and Accounts 2021.
Our third quarter statement last year was based on the 16-week period from 28 February to
The following table sets out revenues for
Third quarter GBPm Change at actual currency
2022 1,727 81%
2021 955 223%
2020 296 -82%
2019 1,672 2%
2018 1,645 6%
In future our reporting will follow this pattern.
Trading update
See release at: https://www.abf.co.uk/media/news/2022/q3-trading-statement-
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