Associated British Foods (ABF) Shares Rose 2.47% on Q1 Update

The Associated British Foods plc (LON: ABF) share price rose 2.47% after releasing a trading update for the sixteen weeks to 6 January 2024. The company noted that its grocery sales during the fiscal first quarter were £1,414 million, marking a 1.8% improvement from last year. 

However, the company's ingredient sales were down 2.8% at £698 million. The firm’s agriculture sales fell 12.1% to £572 million. Still, the retailer’s sugar sales were up 3.8% to £825 million, while its retail sales were up an impressive 7.3% to £3,376 million. 

The company’s grocery division has shown impressive results. Its brands in the United States, including its Stratas partnership in the edible oils sector, have maintained their robust growth from the previous year. 

Among its international brands, Twinings has seen successful trading in its major markets. Ovaltine showed notable success in Western Europe, though it faced some obstacles in Asian markets.

In the Ingredients sector, the yeast and bakery ingredients segment, led by AB Mauri, continued its upward trajectory in sales and profits, echoing last year's success. However, some segments of ABF Ingredients experienced a downturn due to ongoing customer reductions in stock. 

The Agriculture division saw a dip in sales, but there are emerging signs of recovery in certain feed markets. Regarding its Sugar business, the processing of the UK sugar beet crop is progressing, and early indications suggest a substantial increase in sugar production compared to last year, despite recent weather challenges. 

This aligns production closer to historical levels. Vivergo experienced varied trading results but showed overall improvement from the previous year. Our southern African sugar operation, Illovo, encountered mixed results due to production and currency issues.

Primark experienced a positive trading period, with a 7.9% increase in sales. The period began slowly due to unseasonably warm weather but saw a surge in sales around Christmas. Like-for-like sales grew by 2.1%, driven by higher average selling prices.

Our product range performed well during this period. Sales in womenswear and menswear were strong, especially in performance wear, leisurewear, tailored clothing, and the Rita Ora collection. The firm’s Christmas product lines also saw robust sales and sell-through rates. 

Associated British Foods (ABF) share price. 

The Associated British Foods (ABF) share price rose 2.47% to trade at 2320.0p from Monday’s closing price of 2264.0p.