TIDMABF
RNS Number : 0783M
Associated British Foods PLC
12 September 2023
Pre-close Trading Statement
Associated British Foods plc today issues the following update
prior to entering the close period for its full year results for
the 52 weeks to 16 September 2023, which are scheduled to be
announced on 7 November 2023.
References to sales growth in the following commentary are based
on constant currency except where stated.
Financial year 2022-2023
-- For the Group overall, outlook for this financial year is slightly
better than previous expectations of Group adjusted operating profit
to be moderately ahead of last year
-- Food
-- We continue to see strong sales growth, particularly in Grocery
and Ingredients and a slightly better than expected performance
in Sugar
-- Adjusted operating profit now expected to be strongly ahead
of the previous financial year
-- Retail
-- Sales expected to be around GBP9.0bn, 15% ahead of sales last
year with like-for-like sales growth of 9%
-- Strong fourth quarter sales growth, expected to be 15% with
like-for-like growth of 8%
-- Sales growth has been driven by selective price increases, well
received ranges and strongly performing new stores
-- Digital development: rollout of enhanced website is now complete,
UK trial of Click and Collect extended to womenswear
-- Second half adjusted operating profit margin expected to be
slightly below 8% and for the full financial year to be around
8%
-- GBP442m of the GBP500m share buyback programme completed as at the
close of trading on 11 September
Outlook for 2023-2024
The Group continues to trade well, managing inflation,
recovering cash margin and continuing to drive sales in a
challenging macro-economic environment.
At this stage we still expect Sugar to make a substantial
improvement in profitability in the next financial year. This will
be driven by a marked improvement in the performance of British
Sugar, driven by an anticipated better UK sugar beet crop and a
significant reduction in losses at Vivergo.
At Primark, we continue to expect a substantial recovery in
gross margin as a result of lower material costs, the weakening of
the US dollar against sterling and the euro and lower freight
costs, all of which have improved in recent weeks. We therefore
expect Primark adjusted operating profit margin to recover strongly
in the next financial year.
Fourth Quarter - Food
In the fourth quarter of this financial year our Grocery
businesses traded slightly ahead of expectations. Our international
brands, such as Twinings, Ovaltine, Blue Dragon and Patak's,
continue to perform well. In particular, in the US all our brands
are trading strongly. The trajectory in UK bakeries continues to
improve. We now expect full year adjusted operating profit to be
significantly higher than last year.
Our Sugar business traded slightly better than expected in the
fourth quarter, with continued strong performance in Illovo's key
African markets, lower profitability at British Sugar driven by the
production shortfall from the 2022/23 campaign, and much reduced
losses at our bioethanol plant, Vivergo. We now expect Sugar
adjusted operating profit to be modestly above last year.
We continue to expect adjusted operating profit in our
Ingredients division to be well ahead of last year. As previously
stated, trading has been particularly strong at AB Mauri with good
cost recovery and resilient volumes, with growth across the
Americas. This trading performance continued to be ahead of our
expectation in the fourth quarter of the financial year.
Our Agriculture business recovered somewhat in the second half
of the financial year. However, due to its performance in the first
half of the financial year, we expect adjusted operating profit to
be modestly below last year. In the fourth quarter of the financial
year we completed the acquisition of National Milk Records.
Fourth Quarter - Retail
In this fourth quarter we expect Primark sales to be around 15%
higher than in the same period in the previous financial year, with
like-for-like sales growth in the quarter of around 8%.
In the UK sales for the fourth quarter are expected to be up 8%
with like-for-like sales expected to be up 7%. In this quarter, we
saw unusually variable and unseasonable weather especially in July,
then in the first half of August, and again in more recent weeks,
all of which impacted transactions and footfall. Despite these
conditions, our performance was resilient. Our share of the UK
market increased to 6.4% from 6.2% (1) for the 12 weeks to 20
August.
In Europe excluding the UK, sales for the fourth quarter are
expected to be 18% higher with like-for-like sales expected to be
up 9%. Similar to the UK, the business traded well despite
challenging weather with especially hot conditions in several
regions across Europe.
In the US sales are expected to be 45% higher in the fourth
quarter driven by the strong programme of new store openings. We
opened four new stores in the quarter.
For the financial year as a whole , sales are therefore expected
to be around 15% ahead of sales last year (UK 11%, Europe excluding
the UK 18%). These higher sales are the result of limited and
carefully selected price increases through this financial year to
partially recover high levels of input cost inflation, assisted by
a strong performance from new stores opened in the year, and by
demand for our attractive ranges. We expect like-for-like sales
growth for the financial year to be around 9% (UK 11%, Europe
excluding the UK 8%), with like-for-like sales likely to be around
7% in the second half of the financial year, after the 10%
like-for-like growth of the first half of the financial year.
Expansion of the store estate made good progress in the fourth
quarter with eight stores opened since our last update comprising
four in the US and one each in France, Spain, Poland and Romania.
Today we are opening a store in Melilla, the Spanish territory in
North Africa, and our new store in Salisbury, UK, is due to open
tomorrow. Our plans to restructure and grow our business in Germany
are progressing well.
At the end of this financial year we expect to be trading from
432 stores with 18.2 million sq ft of selling space, an increase of
1.1 million sq ft of selling space before a reduction of 0.2
million sq ft in selling space in our German estate.
Adjusted operating profit margin will be weaker in the second
half of the financial year due to higher-than-expected stock loss
from stores across the estate and a modest amount of German
restructuring costs. We now expect second half adjusted operating
profit margin to be slightly below 8% and for the full financial
year to be around 8%.
Primark's digital development programmes continue, and the
enhanced customer website is now operating in all our markets. In
April we announced the expansion of the Click + Collect trial to an
additional 32 stores in London, taking the total number offering
this service to 57 stores in the UK. From tomorrow the service will
extend to include womenswear, alongside the existing offer on
kidswear, as announced last week.
Our performance continues to benefit from the ongoing success of
celebrity and influencer collaborations. A new international
fashion collaboration will be revealed later today in New York.
Notes:
(1) UK clothing footwear and accessories market includes online
sales, Kantar figures for 12 weeks ending 20 August 2023.
Definitions of the alternative performance measures referred to
in this announcement can be found in note 30 of our Annual Report
and Accounts 2022.
For further information please contact:
Associated British Foods:
+44 20 7399 6545
Eoin Tonge, Finance Director
Chris Barrie, Corporate Affairs
Director
Citigate Dewe Rogerson:
+44 20 7638 9571
Holly Gillis +44 7940 797560
Angharad Couch +44 7507 643004
An investor and analyst call will be held at 09.00 BST today,
Tuesday 12 September 2023. All participants must pre-register to
join this conference using the Participant Registration link below.
Once registered, an email will be sent with your unique Registrant
ID.
Participant registration page:
https://register.vevent.com/register/BI73d094ba3e2d4b96afc8690f1554a338
. Please note the Registrant ID number is unique and cannot be
shared.
Notes to editors
Associated British Foods is a diversified international food,
ingredients and retail group with annual sales of GBP17bn and
132,000 employees in 53 countries. It has significant businesses in
Europe, Africa, the Americas, Asia and Australia.
Our aim is to achieve strong, sustainable leadership positions
in markets that offer potential for long-term profitable growth. We
look to achieve this through a combination of growth of existing
businesses, acquisition of complementary new businesses and
achievement of high levels of operating efficiency.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTBRGDCUXBDGXB
(END) Dow Jones Newswires
September 12, 2023 02:00 ET (06:00 GMT)
Associated British Foods (LSE:ABF)
Gráfica de Acción Histórica
De Jun 2024 a Jul 2024
Associated British Foods (LSE:ABF)
Gráfica de Acción Histórica
De Jul 2023 a Jul 2024