AB Foods crashes £10bn revenue barrier

9th Nov 2010 07:27

Primark and British Sugar owner Associated British Foods saw annual sales smash through the £10bn barrier for the first time, with a little help from an extra week's trading.Revenue in the 53 weeks to 18 September was £10,167m, up 10% from £,9255 in the previous year, which only had 52 weeks of trading.Reported profit before tax soared to £763m from £495m the year before. Adjusted profit before tax was £825m, up from £655m a year earlier. "Grocery margins improved, there was an excellent result for Sugar and an outstanding performance from Primark. Our Chinese sugar operations made a significant recovery from the difficulties reported last year and there was no repeat of the losses incurred on vegetable oil futures in the US," said group chairman Charles Sinclair."Growth in adjusted earnings of 25% [to 72.2p], particularly in the prevailing economic climate, is a fine achievement by the whole group," Sinclair added.The group's biggest division, Grocery, saw revenue increase by 7% to £3,406m from £3,188m a year earlier, but this was mainly as a result of currency translation on the sales of George Weston Foods in Australia. On a constant currency basis, sales were flat.The next two biggest divisions, Sugar and Primark, both had strong years.The Sugar division's revenue soared 32% to £1,941m from £1,475m, primarily as a result of a full year's sales from Azucarera, acquired in April 2009, but also with good growth in the UK and from cane sugar in China. This revenue growth, together with an improvement in UK and Chinese margins, drove an operating profit increase of 43% to £240m.Clothing store Primark "had an exceptional year", the company said. Revenue grew to £2,730m from £2,314m, while operating profit advanced to £342m from £252m.Like for like sales were up 6%.On a day when rival clothes retailer Marks & Spencer said its short-term focus will be on its core UK operations, Associated British Foods highlighted the performance of its stores in continental Europe, particularly those in Spain, which performed ahead of expectations and provide encouragement for expansion into these new markets."A number of major projects will be completed over the coming year which will underpin future profit delivery and provide a platform for further growth. Opportunities for further attractive investment are plentiful and the group has the financial capacity to exploit them," said chief executive George Weston.The full year dividend has been increased by 13% to 23.8p.