1. News
January 21, 2022

Associated British Foods reports 19% rise in 16-week group revenue

The group has kept its previous outlook for its adjusted operating profit and adjusted earnings per share (EPS).

British food processing and retailing company Associated British Foods (ABF) has reported a 19% growth in its group revenue on a constant currency basis for the 16 weeks to 8 January.

During this period, revenue from the company’s continuing operations grew by 16% at actual exchange rates even amid rising cases of the Omicron Covid-19 variant worldwide.

ABF attributed the growth to its retail division, whose revenue increased by 36% at a constant currency rate and 32% at an exchange rate.

Despite this, the company’s main retail business, Primark, saw its like-for-like (LFL) sales drop by 11% from a year earlier and 5% lower compared with the same period two years prior.

In the 16 weeks to 8 January, ABF’s grocery sales rose by 2% to £1.21bn ($1.6bn) and sales in its ingredients business were up by 10%.

LFL sales in its UK stores were 10% lower than two years earlier due to a decline in footfall owing to a ‘rapid’ rise in Omicron cases.

ABF’s LFL sales in Europe were 14% below two years ago, while its US LFL sales were up by 4% year-on-year and 37% ahead of two years prior.

In a statement, the company said: “We are proposing to simplify our in-store UK retail management structure as part of our ongoing programme to improve the efficiency of our store retail operations.

“The pressure of disruption to the supply chain we experienced in the autumn has alleviated, although we are still experiencing some delays in dispatch at ports of origin, and we expect longer shipping times to continue for some time.”

In a separate development, ABF has revealed plans to cut a total of 400 jobs at Primark and two of its beverage brands, Ovaltine and Twinings.

The company said this was part of its strategy to streamline its management structure.

Last April, ABF announced it would return £121m of furlough cash to taxpayers following a record sales week after non-essential retail reopened in England.