Investment: ABF's results prove it has recipe for success
The strong pound hammered the Twinings Tea and Burton's biscuits group at the interim stage in April and yesterday's full year numbers showed further scars. A pounds 37m currency hit pushed profits down from pounds 426m to pounds 391m, excluding exceptionals.
The pound may have eased slightly but not enough to make much of a difference. It will continue to hurt British Sugar where profits fell by pounds 28m to pounds 151m last year. A bumper crop boosted processing volumes but this was not enough to counter the currency impact. The division was also hit by a pounds 28m fine from the European Commission for alleged price fixing by the company in the 1980s. This necessitated a pounds 19m provision in the full-year accounts.
Elsewhere, milling and baking profits were hit by the poor harvest last year and overcapacity in the baking market. But in the US the food ingredients businesses have done well with combined profits rising by pounds 10m to pounds 19m helped by a strong performance from the AC Humko speciality oils business. Last month's pounds 120m acquisition of SBI, which produces ingredients for the beauty industry, will increase ABF's presence in this sector.
Although trading will continue to be tough, investors can expect Mr Weston to find a few more uses for ABF's notorious cash pile. Currently standing at pounds 1.5bn and yielding income of pounds 119m, the warchest has more buying power in the present environment of weakening asset values. Although no-one should expect a mega-deal from the cautious Mr Weston, ABF is expected to continue adding on growth businesses in core areas such as food ingredients.
This is not one of ABF's more exciting phases - its trading profits have gone virtually nowhere over the past few years. But it remains a steady performer. On current year profit forecasts of pounds 425m, the shares - up 29p to 589p yesterday - trade on a forward p/e of 18. That is just behind the two most highly rated British food companies, Unilever and Cadbury Schweppes. A solid hold.
That's some guestlist! Stunning images show huge dynastic wedding between Ultra-Orthodox Jewish families which attracted 25,000 guests
Exclusive: Woolwich attack suspect attended meetings of banned Islamist group - and were known by security services
'Sickening, deluded and unforgivable': Horrific attack brings terror to London’s streets
World news in pictures
Ingrid Loyau-Kennett, the mother-of-two hailed as a hero for confronting Woolwich attackers, thought: 'better me than a child'
- 1 Exclusive: Woolwich attack suspect attended meetings of banned Islamist group - and were known by security services
- 2 'Sickening, deluded and unforgivable': Horrific attack brings terror to London’s streets
- 3 Grace Dent: I’m not sure how these people can avoid being called ‘bigots’. And the more ‘civilised’, the worse they are
- 4 Woolwich murder: They killed, then they performed - these men should be starved of our attention
- 5 Woolwich attack: The EDL will seek to exploit this evil crime for their own evil ends
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Nook is donating eReaders to volunteers at high-need schools and participating in exclusive events throughout the campaign.
Get the latest on The Evening Standard's campaign to get London's children reading.
Win anything from gadgets to five-star holidays on our competitions and offers page.