Price deflation and tough deals with the major supermarket multiples have put the squeeze on margins. And though ABF's push into food ingredients means it is less exposed than its rivals to the likes of Tesco and Asda, it is still finding the going tough.
So while ABF's 6.4 per cent fall in underlying annual profits to pounds 384m was in line with expectations - and the management remains highly regarded - there is little to cheer. ABF's share price has slumped from 638p to just 370p, a fall which has prompted the controlling Weston family to increase its holding from 61 to 63 per cent with the aim of increasing it further to 66 per cent.
With the clouds gathering it was fortunate that Garry Weston had shaken up the board prior to his stroke in September. He is not expected to return to the business for several months, and the new chief executive, Peter Jackson, is running the show.
Mr Jackson's plan is to use the pounds 870m cash pile for more acquisitions after the pounds 450m special dividend this year. His targets are in the food ingredients sector, following the American Spi Holdings polyoils deal and the recent Rohn Enzymes acquisition. These businesses are in "added value" sectors where margins are less exposed to competitive pressures.
Elsewhere, costs will be attacked, particularly in the underperforming parts of its grocery division. ABF has some stellar names such as Twinings tea and Silver Spoon sugar, but it also has a chunk of own-label business with the supermarkets, supplying products such as ice cream and biscuits. If these cannot be knocked into shape they will be sold.
Some gems remain. The low-price format of the Penneys/Primark high street retail division is thriving in the present value-conscious climate. The 100-store chain saw profits rise by 87 per cent to pounds 43m and like-for-like sales grow by 20 per cent, around the best in the sector. On current year profit forecasts of pounds 385m, the shares trade on a forward multiple of 11. That may seem cheap, but the rating reflects the challenges of ABF's main markets and there seems little reason to buy the shares just now.