Associated British Foods empire covers agriculture through to fashion with sales of £11.1 billion and 102,000 employees in 46 countries. This year there was a bump in the road due to a manufacturing operation in an Australian meat factories which is one of many of the companies assets. This cost the company a £100 million non-cash charge which I presume the money lost lies in equipment which had to be written off.
At the start of the year, ABF predicted a really good year but due to their profit losing £100 million they had to rethink their forecast. This change was to adjust for the impairment mentioned above but they insist due to strong performance in the sugar division they will be massively ahead of the previous year financially. Their net-debt decreased to £1.2billion from £1.3billion, so they are not borrowing as much money.
ABF still look like they are on fire considering they brought a new company Elephant Atta for £34 million in cash and are still able to reduce their dept. By them paying in cash it is highlighting that they are generating enough money to be able to do these big deals without increasing their net-debt.
There was a surprise outcome with Primark's profits considering the recession across the Euro Zone, probably due to the low cost products. But overall I think ABF need to thank the sugar division which has covered the £15 million investment in Mali and reconstructing costs.
Issues in the Euro Zone could affect the strong prices of sugar in Europe. Maybe Associated British Foods need to start thinking up new plans and breakthroughs as the ongoing price demand for sugar might not stay as strong in the near future.
No comments:
Post a Comment