Overall revenues grew 10 per cent to £10.2bn in the year to September 18 2010, while operating profits grew 26 per cent to £909m, according to ABF’s financial statement.
ABF’s ingredients division posted an 8 per cent revenue increase year-on-year to £1,067m, while operating profits rose 18 per cent to £104m driven by “strong performance from the bakery and enzymes businesses”.
Yeast expansion planned
Yeast was an especially fertile sector for ABF, which confirmed that a new yeast plant in Harbin, China is now operational, while “further expansionary projects in the Americas, China and Europe are planned for the yeast business in the coming year”.
ABF said its yeast business had performed well in Germany and Argentina, while “operational savings” in Italy, France and Spain will deliver savings next year.
Yeast and bakery ingredients division AB Mauri posted strong growth by expanding its UK range of icings, toppings and fillings, while craft bakery launches in South America also drove growth.
Technical ingredients performed particularly well in the US and Mexico, with the launch of an advanced dough-coating system, “which produces tortillas with improved eating qualities, lower sodium and better functional characteristics”.
Chief executive George Weston said: “ABF ingredients had a much better year with strong revenue growth from enzymes and speciality lipids in the US. The global enzyme market continues to grow, new feed and bakery enzymes were launched throughout the year [and] the proteins business made a good recovery.”
Strong UK sugar season
Sugar was another ABF success story, with profits growing 43 per cent against 2008/9 to £1,941m, mainly due to ABF’s acquisition of Spanish concern Azucarera in April 2009 and “good growth in the UK and from cane sugar in China”.
UK exports to the EU “had an excellent campaign”, with improved beet yields and good weather meaning production totalled 1.3m tonnes, 9 per cent more than 2009; a new raw sugar co-refining plant was built at Newark, Nottinghamshire.
ABF said economic factors and trade legislation further boosted UK profits:“The business also benefited from firmer pricing, a stronger euro and 120,000 tonnes of non-quota exports into the world market…at prices above the average of last year.”
Chinese sugar results “were much improved” due to higher prices for beet and cane sugar, but ABF said production totals of 578,000 tonnes could be improved by bettering yields. Spanish concern Azucarera fared modestly due to flooding and rains.
South African sugar operator Illovo was hit by lower volumes, the weakness of the euro and other African currencies against the South African rand, and lower yearly production, 10 per cent down on previous year at 1.7m tonnes.
Nonetheless, ABF is investing heavily in Africa – expanding its Umbombo operation in Swaziland to increase milling capacity for the 2011/12 season, while a factory expansion at Maragra in Mozambique has doubled capacity ahead of the new season.
Despite capital expenditure of £694m this year, ABF reduced its total net debt to £816m, £183m less than in 2008/9.