Associated British Foods (ABF)

[Dod101]

I used to hold ABF but I gave up on it a few years ago as it was not doing a lot. Seeing its share price it is still not doing a lot. I like it though as a very conservative company and the Weston family are canny investors. You need to lie their style though.

Dod

[idpickering]

Trading Update

Our Grocery business performed well. Our US-focused brands, including our Stratas joint venture in edible oils, continued their strong performances from last year. Within international brands, Twinings traded well across its key markets. Ovaltine had a strong performance in Western Europe but was weaker overall as it continued to face challenges in Asia.

In Ingredients, our yeast and bakery ingredients business AB Mauri also maintained the strong performance of last year with further growth in sales and profit. As expected, parts of ABF Ingredients were softer due to continued customer destocking. In Agriculture, sales were weaker although certain of the compound feed markets are beginning to show signs of recovery.

In Sugar, processing of the UK sugar beet crop is under way and indications to date are that sugar production will still be significantly above last year despite the recent weather. This should bring production more broadly into line with historical production levels. Vivergo had a mixed period of trading but was overall much better than last year. Illovo, our sugar business in southern Africa, also had a mixed period with a combination of production and currency challenges.

Primark trading was good overall with sales up 7.9% for the period which was marked by a slow start given the unseasonal warm weather, and strong Christmas trading. Like-for-like sales grew by 2.1% driven by higher average selling prices.

Our product offer performed well in the period. Sales of womenswear and menswear were strong particularly in performance wear, leisure and tailored clothing and in our Rita Ora collection. Sales of our Christmas ranges were also strong and sold through well. At the start of the period sales of many of our cold weather categories were initially slower but have much improved with the recent cold temperatures.

In the UK, total sales in the period rose by 4.5% with like-for-like sales up by 3.8%. Following the period's early warm weather challenges, sales grew strongly in the run-up to Christmas. Primark's market share1 reached a new record at 7.1% for the 12 weeks to 10 December, up 0.1 percentage point from last year.

In Europe excluding the UK, total sales in the period rose by 8.1%, with like-for-like sales up by 1.3%. Performance was mixed with some countries trading well and other countries impacted by a combination of strong comparatives in the same period last year and local economic conditions. Sales in the US grew by 45% in the period driven by new store openings.

https://www.investegate.co.uk/announcem ... e-/8000976

Ian (No holding).