FOR RELEASE 23 APRIL 2024
Interim Results
Announcement
24 weeks ended 2 March
2024
FOR RELEASE 23 APRIL
2024
Associated British Foods plc
results for the 24 weeks ended 2 March 2024
Financial Headlines
|
24 weeks
ended 2 March 2024
|
24 weeks
ended 4 March 2023
|
Actual
currency
change
|
Constant
currency
change
|
Group revenue
|
£9,734m
|
£9,560m
|
+2
%
|
+5
%
|
Adjusted operating
profit
|
£951m
|
£684m
|
+39 %
|
+46 %
|
Adjusted profit before
tax
|
£911m
|
£667m
|
+37 %
|
|
Adjusted earnings per
share
|
90.4p
|
62.0p
|
+46 %
|
|
Operating profit
|
£931m
|
£663m
|
+40 %
|
|
Profit before taxation
|
£881m
|
£644m
|
+37 %
|
|
Basic earnings per
share
|
87.4p
|
67.0p
|
+30 %
|
|
Gross investment
|
£571m
|
£527m
|
+8
%
|
|
Free cash flow
|
£468m
|
£(510)m
|
|
|
Net cash before lease
liabilities
|
£668m
|
£586m
|
|
|
Total net debt
|
£(2,496)m
|
£(2,601)m
|
|
|
Interim dividend
|
20.7p
|
14.2p
|
+46 %
|
|
Adjusted operating profit is
derived from operating profit after taking certain charges and
credits as shown on the face of the condensed consolidated income
statement. References to changes in revenue and adjusted operating
profit in the following segmental commentary are based on constant
currency. The Group has defined and outlined the purpose of its
Alternative performance measures in note 14. These measures are
used within the Financial Headlines and in this Interim Results
Announcement.
George Weston, Chief Executive of
Associated British Foods, said:
"This is a very strong set of
financial results, as we are now benefitting from the restoration
of some normality in our markets and in our supply chains.
Improvements to the Group's operational performance, driven by the
investments and strong execution over the last few years, are now
becoming visible. Group profit margins are recovering accordingly
to more normal levels.
Looking ahead, we continue to
invest with discipline to build further sustainable growth.
Geopolitical risks remain, of course, and the consumer has yet to
fully emerge from cost of living pressures. But the Group is well
positioned to deliver good returns to shareholders."
Group performance
-
|
Revenue growth, up 5%, driven by
continued good momentum in Retail and food businesses
|
-
|
Significant growth in adjusted
operating profit, up 46%, reflecting strong margin
recovery
|
-
|
Investment of £571m, including a
number of strategic initiatives to improve capacity, capability and
sustainability
|
-
|
Free cash flow of £468m,
reflecting profit growth and a significant reduction in working
capital outflow
|
Segmental performance
-
|
Strong Retail sales growth and
further margin recovery
|
|
●
|
Revenue up 7.5% to £4.5bn,
reflecting continued growth in selling space
|
|
●
|
Like-for-like sales up 2.1%, driven
by good performance across most markets due to pricing and
well-received product ranges
|
|
●
|
Significant increase in adjusted
operating profit, up 46% to £508m, with margin recovery to
11.3%
|
|
●
|
Rolling out Click + Collect service
more broadly in the UK
|
-
|
Significant profitability
improvement in Grocery led by US-focused brands and reduction of
losses in Allied Bakeries
|
-
|
Strong profitability improvement
in Sugar, driven by better Vivergo performance
|
-
|
Good profit growth in Ingredients,
driven by continued strong performance in AB Mauri
|
-
|
Higher profitability in
Agriculture due to lower input costs
|
|
|
| |
Shareholder returns
-
|
Significant increase in interim
dividend, to 20.7p, reflecting growth in earnings
|
-
|
Final £56m of first £500m and
£225m of the second £500m share buyback programmes completed in the
period
|
Full year outlook
The Group has delivered a strong
first half performance and is on track to deliver significant
growth in both profitability and cash generation ahead of
expectations at the start of this financial year.
We expect Grocery to continue to
perform well, supported by a step-up in marketing investment,
although the strong profitability of our US-focused brands is
expected to normalise somewhat towards the end of the second half.
In Sugar, we continue to expect a substantial improvement in
profitability, benefitting from a more typical beet crop and
production level at British Sugar and the reduced losses in
Vivergo. Following a better than expected first half, we now expect
Ingredients to perform well this financial year, driven by AB
Mauri. We continue to expect Agriculture to move forward as markets
improve and it integrates and leverages the acquisitions of the
last two years.
We expect Primark to continue to
perform well in the second half driven by our store expansion
programme and the modest levels of like-for-like growth, as we
focus on driving volumes. While the consumer environment remains
soft, we expect to benefit from the strength of our value
proposition, our product relevance and category stretch and our
increasingly effective digital engagement. We expect a moderate
improvement in adjusted operating margin in Primark in the second
half compared to the first half, albeit with a step-up in
investment to support medium-term growth.
The Group continues to prioritise
investment in its businesses and we continue to expect to increase
spend in each of the next few years to slightly above last year's
level.
For further information please
contact:
Associated British
Foods:
+44 20 7399 6545
Eoin Tonge, Finance
Director
Lucinda Baker, Head of Investor
Relations
Chris Barrie, Corporate Affairs
Director
Citigate Dewe Rogerson:
+44 20 7638 9571
Jos Bieneman
|
+44 7834 336 650
|
Angharad Couch
|
+44 7507 643 004
|
Ellen Wilton
|
+44 7921 352 851
|
There will be an analyst and
investor presentation at 09.00am BST today which will be streamed
online and accessed via our website
here.
Notes to editors
Associated British Foods is a
diversified international food, ingredients and retail group with
annual sales of £20bn and 133,000 employees in 55 countries. It has
significant businesses in Europe, Africa, the Americas, Asia and
Australia.
Our aim is to achieve strong,
sustainable leadership positions in markets that offer potential
for long-term profitable growth. We look to achieve this through a
combination of growth of existing businesses, acquisition of
complementary new businesses and achievement of high levels of
operating efficiency.
Operating review
|
24 weeks
ended 2 March 2024
|
24 weeks
ended 4 March 2023
|
Actual
currency
|
Constant
currency
|
Revenue £m
|
2,124
|
2,105
|
+1
%
|
+5
%
|
Adjusted operating profit
£m
|
230
|
173
|
+33 %
|
+39 %
|
Adjusted operating profit
margin
|
10.8%
|
8.2%
|
|
|
Operating profit £m
|
219
|
163
|
+34 %
|
|
Our Grocery segment performed
better than expected in the period. Sales were higher than the same
period last year, driven by last year's price increases to offset
input cost inflation and by volume growth at some of our leading
brands. There has generally been good demand for our brands,
particularly in the US where Mazola, our consumer oils business,
continued to perform very well. Losses reduced at Allied Bakeries
year on year building on the improved performance in the second
half of last year. In general, our brands are now trading in a more
stable environment following last year's high input cost inflation.
Across the Grocery businesses as a whole, adjusted operating profit
margin recovered and adjusted operating profit was significantly
higher.
Among our international brands,
Twinings grew well with good volume growth in its major markets of
the US, UK and France. The growth in the US and UK was supported by
investment in brand and marketing, as well as strong instore
execution. In the US, Twinings expanded its advertising across the
Eastern seaboard and the brand continues to grow its distribution
among key US customers with higher market share as a result. Sales
in the UK were also well ahead, led by infusions and wellbeing
teas. Ovaltine had a more mixed performance. In Thailand, sales of
powder products were lower, partially offset by sales of lower
margin ready-to-drink products, which continue to grow. Sales were
also lower in China where economic conditions have impacted our
channel mix. Sales growth in Ovaltine in Europe continued to be
good. Profitability at both Twinings and Ovaltine reflected the
higher marketing investment in both brands. Performance was
generally good across our other international brands. Patak's
delivered good sales growth against the same period last year, with
international sales and the US in particular driving that
performance. Jordans changed its promotional activity, which
impacted sales but delivered improved results. Mazzetti, our
balsamic vinegars brand enjoyed further good volume
growth.
Our US-focused brands continued to
trade very well. Our consumer oils business, the market leader
Mazola, benefitted from increased production capacity and delivered
growth in sales and volumes and, as a result, good growth in
profitability. Sales of our Fleischmann's yeast and bakery
ingredients business also grew. Stratas, our joint venture that
supplies oils to the foodservice, ingredients and retail markets,
traded in line with last year's strong performance.
Our UK-focused brands generally
traded well. Allied Bakeries delivered a significant reduction in
losses compared to last year with better sales and volumes as
well as improved operational performance. Ryvita started to benefit
from successful new product launches and Dorset Cereals' sales
stabilised with new product development and advertising under way.
Our Australia and New Zealand-focused brands faced a more
challenging consumer environment. Our Tip Top bakery brand was held
back by consumers trading down due to the higher cost of living. In
our Don meat business, volumes were flat although profitability was
impacted by higher input costs. Yumi's, which produces dips and
snacks made with natural ingredients, delivered good growth in
sales and profitability.
|
24 weeks
ended 2 March 2024
|
24 weeks
ended 4 March 2023
|
Actual
currency
|
Constant
currency
|
Revenue £m
|
1,056
|
1,088
|
-3
%
|
+1
%
|
Adjusted operating profit
£m
|
117
|
102
|
+15 %
|
+19 %
|
Adjusted operating profit
margin
|
11.1%
|
9.4%
|
|
|
Operating profit £m
|
110
|
95
|
+16 %
|
|
Performance in our Ingredients
segment continued to be strong and ahead of expectations. This
result was driven by AB Mauri, our yeast and bakery ingredients
business, which maintained its strong performance from last year.
Sales and profits were moderately lower at ABF Ingredients, our
portfolio of specialty ingredients businesses, much as
expected.
AB Mauri performed particularly
well. Sales benefitted from both the annualisation of price
increases and resilient underlying volume growth. In particular, we
delivered strong performances in North America, Brazil, Mexico and
Europe. Our business in Argentina continues to be impacted by
currency devaluation, although performance on an underlying basis
has been resilient. AB Mauri's profitability was supported by the
strong sales and management of input costs. New Food Coatings, our
joint venture in Australia, New Zealand and SE Asia specialising in
seasonings, sauces and ingredients, traded well.
Production began in the period at
our recently built specialty yeast plant in Hull in the UK,
expanding our capability in innovation. Construction continued on
our new yeast plant in northern India where we believe there will
be considerable demand for bakery yeast. In our Australian and New
Zealand Mauri business, our new animal feed mill in Hope Valley,
Western Australia, stepped up production in the period and we
closed our older facility at Bentley as planned.
ABF Ingredients traded broadly as
expected with some continued customer destocking holding back sales
volumes, particularly in our pharmaceutical ingredients business
SPI Pharma, specialty lipids business ABITEC and in feed enzymes,
impacting AB Enzymes. Fytexia, our life sciences polyphenols
business, had good sales growth with botanicals performing
strongly. All businesses benefitted from reduced input costs and
were able to improve their margins. In these businesses, we
continued to make long-term investments in R&D and commercial
capabilities. Overall, we believe there are early signs of a
recovery in volumes and trading towards the end of the period was
better.
We continue to invest in capacity
for Ohly in Hamburg, Germany. Construction of our new enzyme powder
packing plant for AB Enzymes is progressing well and will bring
more capacity. During the period, we announced that Jeremy Xu would
join to become chief executive of ABF Ingredients succeeding
Fabienne Saadane-Oaks who is retiring.
|
24 weeks
ended 2 March 2024
|
24 weeks
ended 4 March 2023
|
Actual
currency
|
Constant
currency
|
Revenue £m
|
850
|
950
|
-11 %
|
-9
%
|
Adjusted operating profit
£m
|
14
|
12
|
+17 %
|
+27 %
|
Adjusted operating profit
margin
|
1.7%
|
1.3%
|
|
|
Operating profit £m
|
10
|
7
|
+43 %
|
|
Sales were lower than the same
period a year ago due to continued soft demand for compound animal
feed in the UK and China, but profits improved on better
procurement, improved pricing and contribution from
acquisitions.
Our Dairy business, which is
developing a unique full-service offer to the dairy sector,
performed well in the period, supported by a good contribution from
National Milk Records, which was acquired last year.
We continue to make progress in
our other global agricultural technology businesses, built around a
combination of established and recently-acquired businesses. At AB
Vista, our international feed additives business, sales and profit
declined from weaker enzyme additives, although we are starting to
see the benefit from growth in non-enzyme additives and product
development is progressing. Profitability improved at AB Neo, our
starter feed business. Profitability also improved at Germains, our
seed supply and development business. Nutritional Supplements, our
equine and pet feed business, traded resiliently.
Our compound feed businesses in
the UK and China continued to have soft demand. Reduced herd sizes
and excess feed production capacity continued to drive market
conditions in the UK, while the Chinese market continued to be
driven by low volumes and reduced herd sizes as a result of
challenging farm profitability. However, there are some signs of
stabilisation in the compound feed businesses, particularly in the
poultry market.
Frontier, our joint venture
business specialising in arable farm inputs and grain marketing in
the UK, had a decline in profits in the period as a result of
reduced demand for its services due to wet weather.
|
24 weeks
ended 2 March 2024
|
24 weeks
ended 4 March 2023
|
Actual
currency
|
Constant
currency
|
Revenue £m
|
1,170
|
1,168
|
In
line
|
+9
%
|
Adjusted operating profit
£m
|
125
|
97
|
+29 %
|
+74 %
|
Adjusted operating profit
margin
|
10.7%
|
8.3%
|
|
|
Operating profit £m
|
121
|
86
|
+41 %
|
|
Sales increased against the same
period last year, driven in part by strong prices in our European
businesses, and by higher volumes at Azucarera and Vivergo.
Profitability improved significantly, driven by a much-reduced loss
at Vivergo and the stronger performance at Azucarera, partially
offset by the phasing of profits at British Sugar. It is worth
noting that there was a foreign exchange translation loss of £36m
on our non-sterling earnings in the period, which mostly impacted
Illovo and resulted in flat profit growth for that business on an
actual currency basis.
Sales at British Sugar were lower
in the period, due to lower stock levels held over from last year's
production campaign, which was severely affected by adverse
weather. We were also impacted by lower co-product prices in the
period. As expected, profits were somewhat lower as a result.
However, despite some disruption caused by wet weather, sugar
production from the 2023/24 campaign is expected to be 1.1 million
tonnes, significantly ahead of last year's unusually low crop
(0.74m tonnes) and broadly in line with historical
levels.
British Sugar continues to make
progress in decarbonising its operations. In the period we approved
two projects: the replacement of a coal boiler at our Cantley plant
and new evaporators at our Wissington plant to increase efficiency
and significantly reduce energy usage.
Sales grew at Azucarera reflecting
larger acreage and higher volumes, supported by higher European
sugar prices. Profits grew accordingly, despite higher beet and raw
cane costs, which were partially offset by lower energy
costs.
Illovo, our set of sugar
businesses in southern Africa, traded well in general with good
domestic sales growth. Profits were flat in actual currency after
the impact of foreign currency translation. Our business in Zambia
had good trading with higher sales and production. Our business in
Malawi had higher sales but lower production due to adverse weather
and poor cane yields caused by recent cyclones. It was also
impacted by currency devaluation but this was managed effectively
through pricing. Tanzania also had lower production due to adverse
weather. The half year on half year results benefitted from
non-recurring prior-year losses in Mozambique, which remains closed
due to severe flooding last year.
Vivergo, our bioethanol plant in
the UK, is now delivering a good operational performance. However,
margins continued to be volatile, which impacted financial
performance in the period. Notwithstanding these trading
conditions, the business reduced its losses substantially in the
period. Due to this volatility in margin, an impairment of £18m was
recognised.
Following a review, we closed our
sugar business in the north of China and we are in the process of
selling its assets and this has now been disclosed as a business to
be closed rather than a continuing activity.
|
24 weeks
ended 2 March 2024
|
24 weeks
ended 4 March 2023
|
Actual
currency
|
Constant
currency
|
Revenue £m
|
4,500
|
4,228
|
+6
%
|
+7.5 %
|
Adjusted operating profit
£m
|
508
|
351
|
+45 %
|
+46 %
|
Adjusted operating profit
margin
|
11.3%
|
8.3%
|
|
|
Operating profit £m
|
508
|
351
|
+45 %
|
|
Primark delivered strong sales
growth in the period. This was driven by newly-opened stores and by
last year's carefully selected price increases to offset inflation.
Sales of womenswear and menswear both grew well, as did sales of
our health and beauty ranges. Our digital engagement continued to
support sales growth in the period.
Sales were up 7.5% in the period,
following the previously reported sales growth up 7.9% in the 16
weeks to 6 January 2024. Trading in that period was marked by a
slow start for many cold weather categories due to unseasonal warm
weather, followed by strong Christmas trading with our seasonal
ranges selling through well. Sales of womenswear and menswear were
strong, particularly in performance wear, leisure, knitwear as well
as our Rita Ora collection. In the 8 weeks to 2 March 2024, sales
increased by 6.3%. Trading was generally softer in terms of
volumes. Due to prolonged colder weather, average selling prices
were higher than expected in the period across cold-weather
products with generally good sell-through of stock. Sales of Home
were strong, but cold and wet weather slowed sales of luggage,
beach and swimwear.
Overall, new stores contributed
5.4% of sales growth, due to both increased selling space and
higher sales densities. Like-for-like sales growth was 2.1% in the
period, driven by higher average selling prices, partially offset
by slightly smaller basket sizes and accordingly lower volumes.
Footfall was broadly in line with the same period last year and we
saw notably strong trading at our destination city centre stores,
particularly where located in tourist destinations.
In the UK, sales grew by 4.3%
against the same period last year, driven by like-for-like sales
growth of 3.6% and a contribution from new space of 0.7%. Trading
was marked by warm weather early in the period, good sales of
seasonal ranges at Christmas and soft trading in January and
February due to wet weather and commuter transport disruption. Our
city centre stores performed well with the continued return of
tourists and office workers particularly benefitting our stores in
Oxford Street, London, Edinburgh and Birmingham. Primark's market
share(1) continued to grow, increasing from 6.7% to 6.9%
in the 24 weeks to the end of the period.
In Europe (excluding the UK),
sales grew by 7.9%. New selling space contributed 6.4% to that
growth, with like-for-like sales up 1.5%. This like-for-like metric
was impacted by the fast pace of store expansion, particularly in
France and Italy. Trading in France was very good, with footfall
driving significant growth in total sales, supported by good
like-for-like sales growth, strong performance from our new stores
and overall outperforming the market.
Trading in Spain was good, also outperforming the market, with
strong sales growth in our stores located in regions benefitting
from tourism, albeit partially offset by adverse weather
conditions. In Italy, sales were well ahead with a very strong
performance in new stores. In the Republic of Ireland and Portugal,
we had only satisfactory trading with warm weather holding back
pre-Christmas sales and slower recovery in consumer sentiment.
Trading in the Netherlands was strong, with good like-for-like
sales driven by operational improvements. In Germany, underlying
trading was strong with total sales lower as a consequence of our
reduced selling space but like-for-like sales increased despite
industry-wide strike action. The restructuring in Germany is now
largely complete and has resulted in improved sales densities and
profitability, as expected. We also launched our first ever
multi-media brand campaign in the country.
Sales growth in the US was 38.4%,
driven by new store openings which performed well. Adjusted
operating profit improved significantly in the period. We opened
three new stores in the period: Woodfield Mall in Chicago, Smith
Haven Long Island, and Charlotte North Carolina. We opened a new
distribution centre in Jacksonville, Florida, to serve our
expansion in southern states and at the same time, we announced
lease agreements for stores in Tennessee, Maryland and
Texas.
Our digital growth strategy
continues to progress. Traffic to our websites increased in all
markets in the period, with record traffic levels over Christmas.
In most markets, some 20% of visitors now use the stock checker
facility and we believe this facility, combined with the other
improvements we have made to the websites, provide meaningful
support to sales. We continue to invest in search engine
optimisation, CRM and paid marketing.
We have completed our latest Click
+ Collect trial in the UK. The trial showed good basket sizes and
strong additional attachment store sales. The trial also
demonstrated that the Click + Collect service is satisfying
unfulfilled demand from both new and existing customers by offering
them extended choice beyond their local store offering. We believe
we have developed a bespoke version of ecommerce that is additive
to our store-led model, enhances our overall digital engagement
programme and delivers incremental sales. The results give us
confidence to roll out this service across all our stores in
England, Wales and Scotland, with a curated product range across
womenswear, kids, menswear and a selection of homewear.
Adjusted operating profit margin
for the period recovered to 11.3%, significantly higher than the
same period last year, reflecting an increase in all countries.
This growth in margin was driven by a significant improvement in
product gross margin, driven by lower material and freight costs
and the annualisation of prior year price increases, partially
offset by the impact of foreign exchange. Stock loss remained high
in most countries and we continue to invest in actions to mitigate
this loss. Labour costs in the period increased in line with our
expectations. We have been stepping up investment across
technology, digital and customer activities to support growth. We
expect this investment to continue to increase over the medium
term.
Retail selling space increased by
0.2m sq ft since the last financial year-end and on 2 March 2024 we
were trading from 440 stores from 18.4m sq ft of selling space.
Nine new stores opened in the period: three in the US, three in
France, two in Spain, and one in Poland. One store in Germany was
closed in the period and seven stores are now rightsized. We have
also rightsized four stores in the Netherlands in the period.
Towards the end of the period Primark opened a store at La Vaguada
in Madrid, the first of four openings in the city this year. We are
expanding into our 16th market in the second half of the
financial year, opening our first store in Hungary. We continue to
target 530 stores by the end of 2026 and have visibility for
continued footprint expansion beyond.
1. Kantar, Primark market share of
the total UK clothing, footwear and accessories market including
online by value, 24-week data to 3 March 2024
Financial review
Group performance
Group revenue in the period was
£9.7bn, 2% ahead of last year at actual rates and 5% at constant
currency, driven by continued good momentum in our Retail and food
businesses. The Group generated an adjusted operating profit of
£951m, an increase of 39% at actual rates compared to last year,
reflecting strong margin recovery, and improvements in operational
performance. Operating profit for the Group of £931m was 40% ahead,
after charging exceptional items of £6m (2023 half year -
nil).
For the period, there was a
translation loss of £57m of our non-sterling earnings, primarily
driven by the strengthening of sterling against the US dollar and
the euro, as well as against some of our trading currencies in our
businesses in Africa.
Segmental summary
|
Revenue
|
Adjusted operating profit
|
|
24 weeks
ended
2
March
2024
£m
|
24 weeks
ended
4
March
2023
£m
|
Change
%
|
52 weeks
ended
16
September 2023
£m
|
24 weeks
ended
2
March
2024
£m
|
24
weeks
ended
4
March
2023
£m
|
Change
%
|
52 weeks
ended
16
September 2023
£m
|
At actual rates
|
Grocery
|
2,124
|
2,105
|
+0.9
|
4,198
|
230
|
173
|
+32.9
|
448
|
Ingredients
|
1,056
|
1,088
|
-2.9
|
2,157
|
117
|
102
|
+14.7
|
214
|
Agriculture
|
850
|
950
|
-10.5
|
1,840
|
14
|
12
|
+16.7
|
41
|
Sugar
|
1,170
|
1,168
|
+0.2
|
2,474
|
125
|
97
|
+28.9
|
179
|
Retail
|
4,500
|
4,228
|
+6.4
|
9,008
|
508
|
351
|
+44.7
|
735
|
Central
|
-
|
-
|
-
|
-
|
(45)
|
(40)
|
-12.5
|
(94)
|
|
9,700
|
9,539
|
+1.7
|
19,677
|
949
|
695
|
+36.5
|
1,523
|
Business to be closed
|
|
|
|
|
|
|
|
|
Sugar
|
34
|
21
|
|
73
|
2
|
(11)
|
|
(10)
|
|
9,734
|
9,560
|
+1.8
|
19,750
|
951
|
684
|
+39.0
|
1,513
|
The segmental analysis by division
has been set out in the operating reviews. The closure of our China
North Sugar business has now been disclosed as a business to be
closed rather than a continuing activity.
The segmental analysis by
geography is set out in note 1 of the condensed financial
statements. Of note is the increase in adjusted operating profit in
Europe and the UK driven by Retail and an improved performance in
our Sugar segment. The Noth America increase was driven by the
continued success of our Grocery and Ingredients businesses and
Retail in the US.
Adjusted earnings per
share
|
24 weeks
ended 2 March
2024
£m
|
24 weeks
ended 4 March
2023
£m
|
Change
%
|
52 weeks
ended 16 September 2023
£m
|
|
Adjusted operating
profit
|
951
|
684
|
+39.0
|
1,513
|
Net finance income excluding lease
interest
|
18
|
4
|
|
11
|
Other financial
(expense)/income
|
(13)
|
20
|
|
40
|
Lease interest
|
(45)
|
(41)
|
|
(91)
|
Adjusted profit before
taxation
|
911
|
667
|
+36.6
|
1,473
|
Taxation on adjusted
profit
|
(211)
|
(165)
|
|
(346)
|
Adjusted profit after
tax
|
700
|
502
|
+39.4
|
1,127
|
Adjusted earnings attributable to
equity shareholders
|
685
|
487
|
+40.7
|
1,103
|
Adjusted earnings per share (in
pence)
|
90.4
|
62.0
|
+45.8
|
141.8
|
Net finance income and other financial
expense
Finance income continued to
increase as a result of higher interest rates earned on our cash
balances. In other financial expenses, we recorded losses on cash
and foreign exchange balances on some of our African countries of
operations, such as Nigeria and Malawi, where material currency
devaluations have taken place. Lease interest increased during the
period due to higher interest rates and as we continue our Primark
store expansion programme. We expect a similar level of finance
income and lease interest in the second half, however, we do not
expect the losses on cash and foreign exchange balances in other
financial expenses to repeat.
On an adjusted basis, profit
before tax was up 36.6%, to £911m.
Taxation on adjusted profit
In the period, the adjusted tax
charge increased to £211m, primarily driven by the increase in
adjusted profit before tax, offset by a decrease in the adjusted
effective tax rate to 23.2% from 24.7% for the same period last
year. The adjusted effective tax rate includes the full-year impact
of the increase in UK corporation tax rate from 19% to 25% in April
2023 but this is more than offset by the changes to the mix in
profits by jurisdiction.
Adjusted earnings per share increased by 45.8%
to 90.4p per share for the period. This increase is driven by the
increase in adjusted earnings. The adjusted earnings per share also
continued to benefit from the reduction in weighted average number
of shares, from 786 million for the same period in 2023 to 758
million for the same period in 2024, as a result of the continuing
buyback programmes. The weighted average number of shares will
continue to reduce from the completion of the remaining £275m of
our second share buyback programme.
Basic earnings per
share
|
24 weeks
ended 2 March
2024
£m
|
24 weeks
ended 4 March
2023
£m
|
Change
%
|
52 weeks
ended 16 September 2023
£m
|
|
Adjusted profit before
taxation
|
911
|
667
|
+36.6
|
1,473
|
Acquired inventory fair value
adjustments
|
(1)
|
(2)
|
|
(3)
|
Amortisation of non-operating
intangibles
|
(20)
|
(20)
|
|
(41)
|
Exceptional items
|
(6)
|
-
|
|
(109)
|
Profits less losses on sale and
closure of businesses
|
(10)
|
(2)
|
|
(3)
|
Profits less losses on disposal of
non-current assets
|
8
|
2
|
|
28
|
Transaction costs
|
(1)
|
(1)
|
|
(5)
|
Profit before taxation
|
881
|
644
|
+36.8
|
1,340
|
Taxation
|
(203)
|
(102)
|
|
(272)
|
Profit after tax
|
678
|
542
|
+25.1
|
1,068
|
Earnings attributable to equity
shareholders
|
663
|
527
|
+25.8
|
1,044
|
Basic earnings per share (in
pence)
|
87.4
|
67.0
|
+30.4
|
134
|
Profit before tax of £881m was
36.8% ahead of the prior period.
This included a non-cash
exceptional impairment charge of £6m in our Sugar segment. This
comprised an impairment charge of £18m in our Vivergo business,
which continues to be impacted by the volatility in margin. In
addition, a £12m reversal of the £35m impairment recognised in the
Sugar business in Mozambique at the end of financial year 2023 was
also taken. No exceptional impairment charge was recognised in the
same period in 2023.
A non-cash provision of £10m was
included in profit less losses on sale and closure of business in
respect of the closure of our China North Sugar
business.
Total tax charge in the
period was £203m (2023 half year - £102m). The increase compared to
the prior period reflects the increase to the adjusted tax charge.
Last year included a £58m deferred tax credit on exceptional items,
reflecting the recognition of deferred tax assets relating to
Primark Germany.
Earnings attributable to equity shareholders
were £663m and basic earnings per share were
87.4p, 30.4% ahead of the same period last year.
Cash flow
|
|
24 weeks
ended 2 March
2024
£m
|
24 weeks
ended 4 March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
|
|
Adjusted EBITDA
|
|
1,377
|
1,090
|
2,361
|
Repayment of lease liabilities net
of incentives received
|
|
(148)
|
(123)
|
(246)
|
Working capital
|
|
6
|
(703)
|
(216)
|
Capital expenditure
|
|
(565)
|
(498)
|
(1,073)
|
Purchase of subsidiaries, joint
ventures and associates
|
|
(4)
|
(29)
|
(94)
|
Sale of subsidiaries, joint
ventures and associates
|
|
-
|
4
|
4
|
Net interest paid
|
|
(29)
|
(35)
|
(74)
|
Income taxes paid
|
|
(145)
|
(148)
|
(341)
|
Share of adjusted profit after tax
from joint ventures and associates
|
|
(51)
|
(51)
|
(127)
|
Dividends received from joint
ventures and associates
|
|
43
|
43
|
107
|
Other
|
|
(16)
|
(60)
|
(32)
|
Free cash flow
|
|
468
|
(510)
|
269
|
Share buyback
|
|
(281)
|
(140)
|
(448)
|
Dividends
|
|
(348)
|
(235)
|
(345)
|
Movement in loans and current
asset investments
|
|
52
|
(10)
|
(10)
|
Cash flow
|
|
(109)
|
(895)
|
(534)
|
There was free cash inflow in the
period totalling £468m as a result of higher operating profit
generated by the Group, and lower working capital movement compared
to the same period last year. The better performance in working
capital reflects a normalisation of inventory at Primark as
expected, stock reductions in most of our food businesses, reducing
inflation overall, and other working capital initiatives. Overall,
we continue to expect a decrease in working capital at the year
end, primarily driven by the lower Primark inventory.
The capital expenditure increase
was driven by the number of large capital projects in Primark and
the food businesses.
The level of cash tax was lower as
expected due to the reallocation of historical overpayments and
favourable settlements of historical enquiries and returns. We
expect this lower level to continue for the year. 'Other' cash flow
benefitted from the abatement of UK employer pension
contributions.
There was cash outflow of £281m
for our continued share buyback programmes. We also paid £348m for
total dividends in this period, which reflects the final 2023
dividend of £251m and a special dividend of £97m that was declared
in respect of the 2023 financial year.
Financing and liquidity
|
|
At 2
March 2024
£m
|
At 4
March
2023
£m
|
At 16
September 2023
£m
|
|
|
Short-term loans
|
|
(109)
|
(17)
|
(99)
|
Long-term loans
|
|
(432)
|
(480)
|
(394)
|
Lease liabilities
|
|
(3,164)
|
(3,187)
|
(3,160)
|
Total debt
|
|
(3,705)
|
(3,684)
|
(3,653)
|
Cash at bank and in hand, cash
equivalents and overdrafts
|
|
1,209
|
1,080
|
1,388
|
Current asset
investments
|
|
-
|
3
|
-
|
Total net debt
|
|
(2,496)
|
(2,601)
|
(2,265)
|
Leverage ratio
|
|
0.9
|
1.2
|
1.0
|
At 2 March 2024, the Group
held cash and cash equivalents, net of bank overdrafts of £1,209m.
In addition, the Group has an undrawn Revolving Credit Facility
('RCF') for £1.5bn, which is free from performance covenants.
Following the first extension in 2023, the facility was extended
for an additional year in April 2024 bringing the final maturity to
June 2029. Our final $100m Private Placement notes were repaid on 2
April 2024.
Total liquidity at 2 March
2024 was £2.5bn, comprising the £1.3bn of cash, less £0.2bn of
short-term loans and overdrafts and £0.1bn of inaccessible cash,
plus the £1.5bn RCF. This compares to £2.7bn at the end of the 2023
financial year and £2.5bn at the end of the same period last
year.
Pensions
Employee benefits assets primarily
comprise the accounting surplus of the Group's UK defined benefit
scheme. At the end of the period the surplus in the UK was £1,476m
(2023 half and full year - £1,397m). The increase from the end of
the last financial year reflects positive asset returns and a
decrease in long term expected inflation, partially offset by an
increase in the liabilities due to a decrease in corporate bond
yields.
Dividends and share
buyback
During the period, we completed
our first £500m share buyback programme and £225m of our second
£500m share buyback programme, with the remaining amount
anticipated to be completed by the end of the financial year. On
2 March 2024, the financial leverage ratio was 0.9
times.
The Board has declared an interim
dividend of 20.7p a share, an increase of 46% on same period last
year reflecting the growth in earnings. The dividend will be paid
on 5 July 2024 to shareholders registered at the close of business
on 31 May 2024.
Our principal risks and
uncertainties
Details of the principal risks
facing the Group's businesses at an operational level were included
on pages 68 to 75 of the Group's Annual Report and Accounts for the
52 weeks ended 16 September 2023, as part of the Strategic Report.
We have reassessed our principal risks for the remaining six months
of the financial year as the world continues to face political and
economic uncertainties.
The ongoing Russian war in Ukraine
continues to drive some economic uncertainty in global markets. We
have experienced no direct impact by the conflict in the Middle
East, but we are monitoring the situation. Whilst supply chain
volatility has eased and energy prices and sea freight costs have
reduced, the ongoing geopolitical situation remains fragile. We
continue to monitor the situation in the Red Sea but at this stage
we do not expect any significant disruption to our supply chain.
All geopolitical uncertainty could have an impact on the cost of
raw materials and key commodities. Our procurement teams continue
to work closely with suppliers to maintain the effective operation
of our supply chains.
Consumer spending has continued to
be resilient in this trading period. However, a number of our
countries continue to face the risk of recession that could trigger
market instability. The impact on our businesses will depend on the
extent of government intervention and the duration of any economic
downturns.
General elections are planned in a
number of our key markets, including UK, USA, and in a number of
countries in South America, Africa and South East Asia. The
commercial implications of any governmental changes are being
evaluated.
On average, sterling has slightly
strengthened against most of our trading currencies this year,
resulting in a small negative translation impact on operating
profit. A number of businesses have benefitted from lower input
costs due to the depreciation of energy costs. Agriculture
commodity prices varied across the Group with some indexes seeing
higher levels of volatility. Businesses continue to manage
commodity price risk under their existing risk management
frameworks and, where appropriate, reflect this in pricing of
products.
After making enquiries, the
directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence to
the end of the 2025 financial year. For this reason, they
continue to adopt the going concern basis in preparing the
Condensed Consolidated Interim Financial Statements. See note 11 to
the Condensed Consolidated Interim Financial Statements.
Condensed consolidated income
statement
for the 24 weeks ended 2 March
2024
|
|
24 weeks
ended 2 March
2024
£m
|
24 weeks
ended
4
March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
Continuing operations
|
Note
|
Revenue
|
1
|
9,734
|
9,560
|
19,750
|
Operating costs before exceptional
items
|
|
(8,854)
|
(8,949)
|
(18,410)
|
Exceptional items
|
2
|
(6)
|
-
|
(109)
|
|
|
874
|
611
|
1,231
|
Share of profit after tax from
joint ventures and associates
|
|
49
|
50
|
124
|
Profits less losses on disposal of
non-current assets
|
|
8
|
2
|
28
|
Operating profit
|
|
931
|
663
|
1,383
|
|
|
|
|
|
Adjusted operating
profit
|
|
951
|
684
|
1,513
|
Profits less losses on disposal of
non-current assets
|
|
8
|
2
|
28
|
Amortisation of non-operating
intangibles
|
|
(20)
|
(20)
|
(41)
|
Acquired inventory fair value
adjustments
|
|
(1)
|
(2)
|
(3)
|
Transaction costs
|
|
(1)
|
(1)
|
(5)
|
Exceptional items
|
2
|
(6)
|
-
|
(109)
|
|
|
|
|
|
Profits less losses on sale and
closure of businesses
|
7
|
(10)
|
(2)
|
(3)
|
Profit before interest
|
|
921
|
661
|
1,380
|
Finance income
|
|
35
|
22
|
48
|
Finance expense
|
|
(62)
|
(59)
|
(128)
|
Other financial
(expense)/income
|
|
(13)
|
20
|
40
|
Profit before taxation
|
|
881
|
644
|
1,340
|
|
|
|
|
|
Adjusted profit before
taxation
|
|
911
|
667
|
1,473
|
Profits less losses on disposal of
non-current assets
|
|
8
|
2
|
28
|
Amortisation of non-operating
intangibles
|
|
(20)
|
(20)
|
(41)
|
Acquired inventory fair value
adjustments
|
|
(1)
|
(2)
|
(3)
|
Transaction costs
|
|
(1)
|
(1)
|
(5)
|
Exceptional items
|
2
|
(6)
|
-
|
(109)
|
Profits less losses on sale and
closure of businesses
|
7
|
(10)
|
(2)
|
(3)
|
Taxation - UK (excluding tax on exceptional items)
|
|
(59)
|
(28)
|
(40)
|
- UK (on exceptional items)
|
|
4
|
-
|
-
|
- Overseas (excluding tax on exceptional items)
|
|
(148)
|
(132)
|
(300)
|
- Overseas (on exceptional items)
|
|
-
|
58
|
68
|
|
3
|
(203)
|
(102)
|
(272)
|
Profit for the period
|
|
678
|
542
|
1,068
|
|
|
|
|
|
Attributable to
|
|
|
|
|
Equity shareholders
|
|
663
|
527
|
1,044
|
Non-controlling
interests
|
|
15
|
15
|
24
|
Profit for the period
|
|
678
|
542
|
1,068
|
|
|
|
|
|
Basic and diluted earnings per
ordinary share (pence)
|
4
|
87.4
|
67.0
|
134.2
|
Dividends per share paid and
proposed for the period (pence)
|
5
|
20.7
|
14.2
|
47.3
|
Special dividend per share
proposed for the period (pence)
|
|
-
|
-
|
12.7
|
Condensed consolidated statement
of comprehensive income
for the 24 weeks ended 2 March
2024
|
|
24 weeks
ended
2
March
2024
£m
|
24 weeks
ended 4 March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
|
|
Profit for the period recognised
in the income statement
|
|
678
|
542
|
1,068
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
Remeasurements of defined benefit
schemes
|
|
65
|
18
|
(7)
|
Deferred tax associated with
defined benefit schemes
|
|
(17)
|
(2)
|
4
|
Items that will not be
reclassified to profit or loss
|
|
48
|
16
|
(3)
|
|
|
|
|
|
Effect of movements in foreign
exchange
|
|
(151)
|
(179)
|
(470)
|
Net gain on hedge of net
investment in foreign subsidiaries
|
|
2
|
1
|
1
|
Deferred tax associated with
movements in foreign exchange
|
|
-
|
-
|
(5)
|
Current tax associated with
movements in foreign exchange
|
|
-
|
-
|
6
|
Movement in cash flow hedging
position
|
|
(11)
|
(271)
|
(260)
|
Deferred tax associated with
movement in cash flow hedging position
|
|
4
|
62
|
40
|
Share of other comprehensive loss
of joint ventures and associates
|
|
(3)
|
(6)
|
(18)
|
Effect of hyperinflationary
economies
|
|
41
|
26
|
40
|
Items that are or may be
subsequently reclassified to profit or loss
|
|
(118)
|
(367)
|
(666)
|
|
|
|
|
|
Other comprehensive loss for the
period
|
|
(70)
|
(351)
|
(669)
|
|
|
|
|
|
Total comprehensive income for the
period
|
|
608
|
191
|
399
|
|
|
|
|
|
Attributable to
|
|
|
|
|
Equity shareholders
|
|
609
|
191
|
397
|
Non-controlling
interests
|
|
(1)
|
-
|
2
|
Total comprehensive income for the
period
|
|
608
|
191
|
399
|
Condensed consolidated balance
sheet
at 2 March 2024
|
|
2 March
2024
£m
|
4 March
2023
£m
|
16
September 2023
£m
|
|
Note
|
Non-current assets
|
|
|
|
|
Intangible assets
|
|
1,885
|
1,901
|
1,870
|
Property, plant and
equipment
|
|
5,944
|
5,702
|
5,766
|
Right-of-use assets
|
|
2,365
|
2,386
|
2,350
|
Investments in joint
ventures
|
|
297
|
297
|
303
|
Investments in
associates
|
|
99
|
91
|
91
|
Employee benefits
assets
|
|
1,523
|
1,440
|
1,446
|
Income tax
|
|
23
|
23
|
23
|
Deferred tax assets
|
|
186
|
204
|
193
|
Other receivables
|
|
70
|
58
|
63
|
Total non-current
assets
|
|
12,392
|
12,102
|
12,105
|
Current assets
|
|
|
|
|
Assets classified as held for
sale
|
6
|
-
|
92
|
-
|
Inventories
|
|
3,120
|
3,601
|
3,207
|
Biological assets
|
|
128
|
129
|
99
|
Trade and other
receivables
|
|
1,677
|
1,824
|
1,778
|
Derivative assets
|
|
87
|
92
|
96
|
Current asset
investments
|
8
|
-
|
3
|
-
|
Income tax
|
|
69
|
68
|
102
|
Cash and cash
equivalents
|
8
|
1,268
|
1,213
|
1,457
|
Total current assets
|
|
6,349
|
7,022
|
6,739
|
Total assets
|
|
18,741
|
19,124
|
18,844
|
Current liabilities
|
|
|
|
|
Liabilities classified as held for
sale
|
6
|
-
|
(26)
|
-
|
Lease liabilities
|
8
|
(345)
|
(322)
|
(335)
|
Loans and overdrafts
|
8
|
(168)
|
(150)
|
(168)
|
Trade and other
payables
|
|
(2,799)
|
(2,892)
|
(2,953)
|
Derivative liabilities
|
|
(71)
|
(134)
|
(69)
|
Income tax
|
|
(95)
|
(140)
|
(109)
|
Provisions
|
|
(61)
|
(60)
|
(55)
|
Total current
liabilities
|
|
(3,539)
|
(3,724)
|
(3,689)
|
Non-current liabilities
|
|
|
|
|
Lease liabilities
|
8
|
(2,819)
|
(2,865)
|
(2,825)
|
Loans
|
8
|
(432)
|
(480)
|
(394)
|
Provisions
|
|
(55)
|
(28)
|
(48)
|
Deferred tax
liabilities
|
|
(660)
|
(593)
|
(626)
|
Employee benefits
liabilities
|
|
(71)
|
(77)
|
(69)
|
Total non-current
liabilities
|
|
(4,037)
|
(4,043)
|
(3,962)
|
Total liabilities
|
|
(7,576)
|
(7,767)
|
(7,651)
|
Net assets
|
|
11,165
|
11,357
|
11,193
|
Equity
|
|
|
|
|
Issued capital
|
|
43
|
45
|
44
|
Other reserves
|
|
180
|
178
|
179
|
Translation reserve
|
|
(178)
|
253
|
(42)
|
Hedging reserve
|
|
(10)
|
(49)
|
2
|
Retained earnings
|
|
11,043
|
10,830
|
10,910
|
Total equity attributable to
equity shareholders
|
|
11,078
|
11,257
|
11,093
|
Non-controlling
interests
|
|
87
|
100
|
100
|
Total equity
|
|
11,165
|
11,357
|
11,193
|
Condensed consolidated cash flow
statement
for the 24 weeks ended 2 March
2024
|
|
24 weeks
ended 2 March
2024
£m
|
24 weeks
ended 4 March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
|
Note
|
Cash flow from operating
activities
|
|
|
|
|
Profit before taxation
|
|
881
|
644
|
1,340
|
Profits less losses on disposal of
non-current assets
|
|
(8)
|
(2)
|
(28)
|
Profits less losses on sale and
closure of businesses
|
|
10
|
2
|
3
|
Transaction costs
|
|
1
|
1
|
5
|
Finance income
|
|
(35)
|
(22)
|
(48)
|
Finance expense
|
|
62
|
59
|
128
|
Other financial
expense/(income)
|
|
13
|
(20)
|
(40)
|
Share of profit after tax from
joint ventures and associates
|
|
(49)
|
(50)
|
(124)
|
Amortisation
|
|
41
|
39
|
82
|
Depreciation (including of
right-of-use assets)
|
|
403
|
386
|
804
|
Exceptional items
|
|
6
|
-
|
109
|
Acquired inventory fair value
adjustments
|
|
1
|
2
|
3
|
Effect of hyperinflationary
economies
|
|
5
|
8
|
14
|
Net change in the fair value of
current biological assets
|
|
(56)
|
(39)
|
(11)
|
Share-based payment
expense
|
|
13
|
8
|
18
|
Pension costs less
contributions
|
|
25
|
(2)
|
(8)
|
Decrease/(increase) in
inventories
|
|
47
|
(437)
|
(94)
|
Decrease/(increase) in
receivables
|
|
57
|
(115)
|
(107)
|
Decrease in payables
|
|
(98)
|
(151)
|
(15)
|
Purchases less sales of current
biological assets
|
|
5
|
-
|
(9)
|
Decrease in provisions
|
|
(3)
|
(20)
|
(27)
|
Cash generated from
operations
|
|
1,321
|
291
|
1,995
|
Income taxes paid
|
|
(145)
|
(148)
|
(341)
|
Net cash generated from operating
activities
|
|
1,176
|
143
|
1,654
|
Cash flow from investing
activities
|
|
|
|
|
Dividends received from joint
ventures and associates
|
|
43
|
43
|
107
|
Purchase of property, plant and
equipment
|
|
(523)
|
(444)
|
(997)
|
Purchase of intangibles
|
|
(42)
|
(54)
|
(76)
|
Lease incentives
received
|
|
12
|
12
|
62
|
Sale of property, plant and
equipment
|
|
12
|
11
|
48
|
Purchase of subsidiaries, joint
ventures and associates
|
7
|
(4)
|
(29)
|
(94)
|
Sale of subsidiaries, joint
ventures and associates
|
|
-
|
4
|
4
|
Purchase of other
investments
|
|
(2)
|
-
|
(4)
|
Interest received
|
|
26
|
22
|
44
|
Net cash used in investing
activities
|
|
(478)
|
(435)
|
(906)
|
Cash flow from financing
activities
|
|
|
|
|
Dividends paid to non-controlling
interests
|
|
(12)
|
(5)
|
(7)
|
Dividends paid to equity
shareholders
|
5
|
(348)
|
(235)
|
(345)
|
Interest paid
|
|
(55)
|
(57)
|
(118)
|
Repayment of lease
liabilities
|
8
|
(160)
|
(135)
|
(308)
|
Increase/(decrease) in short-term
loans
|
8
|
11
|
(11)
|
(13)
|
Increase in long-term
loans
|
8
|
41
|
-
|
-
|
Decrease in current asset
investments
|
8
|
-
|
1
|
3
|
Share buyback
|
|
(281)
|
(140)
|
(448)
|
Movement from changes in own
shares held
|
|
(3)
|
(21)
|
(46)
|
Net cash used in financing
activities
|
|
(807)
|
(603)
|
(1,282)
|
Net decrease in cash and cash
equivalents
|
|
(109)
|
(895)
|
(534)
|
Cash and cash equivalents at the
beginning of the period
|
|
1,388
|
1,995
|
1,995
|
Effect of movements in foreign
exchange
|
|
(70)
|
(20)
|
(73)
|
Cash and cash equivalents at the
end of the period
|
8
|
1,209
|
1,080
|
1,388
|
Condensed consolidated statement
of changes in equity
for the 24 weeks ended 2 March
2024
|
|
Issued
capital
£m
|
Other
reserves
£m
|
Translation reserve
£m
|
Hedging
reserve
£m
|
Retained
earnings
£m
|
Total
£m
|
Non-
controlling interests
£m
|
Total
equity
£m
|
|
Note
|
Balance as at 16 September
2023
|
|
44
|
179
|
(42)
|
2
|
10,910
|
11,093
|
100
|
11,193
|
Total comprehensive
income
|
|
|
|
|
|
|
|
|
|
Profit for period recognised in
income statement
|
|
-
|
-
|
-
|
-
|
663
|
663
|
15
|
678
|
Remeasurements of defined benefit
schemes
|
|
-
|
-
|
-
|
-
|
65
|
65
|
-
|
65
|
Deferred tax associated with
defined benefit schemes
|
|
-
|
-
|
-
|
-
|
(17)
|
(17)
|
-
|
(17)
|
Items that will not be
reclassified to profit or loss
|
|
-
|
-
|
-
|
-
|
48
|
48
|
-
|
48
|
Effect of movements in foreign
exchange
|
|
-
|
-
|
(135)
|
-
|
-
|
(135)
|
(16)
|
(151)
|
Net gain on hedge of net
investment in foreign subsidiaries
|
|
-
|
-
|
2
|
-
|
-
|
2
|
-
|
2
|
Movement in cash flow hedging
position
|
|
-
|
-
|
-
|
(11)
|
-
|
(11)
|
-
|
(11)
|
Deferred tax associated with
movement in cash flow hedging position
|
|
-
|
-
|
-
|
4
|
-
|
4
|
-
|
4
|
Share of other comprehensive
income of joint ventures and associates
|
|
-
|
-
|
(3)
|
-
|
-
|
(3)
|
-
|
(3)
|
Effect of hyperinflationary
economies
|
|
-
|
-
|
-
|
-
|
41
|
41
|
-
|
41
|
Items that are or may be
subsequently reclassified to profit or loss
|
|
-
|
-
|
(136)
|
(7)
|
41
|
(102)
|
(16)
|
(118)
|
Other comprehensive
income
|
|
-
|
-
|
(136)
|
(7)
|
89
|
(54)
|
(16)
|
(70)
|
Total comprehensive
income
|
|
-
|
-
|
(136)
|
(7)
|
752
|
609
|
(1)
|
608
|
|
|
|
|
|
|
|
|
|
|
Inventory cash flow hedge
movements
|
|
|
|
|
|
|
|
|
|
Amounts transferred to cost of
inventory
|
|
-
|
-
|
-
|
(5)
|
-
|
(5)
|
-
|
(5)
|
Total inventory cash flow hedge
movements
|
|
-
|
-
|
-
|
(5)
|
-
|
(5)
|
-
|
(5)
|
|
|
|
|
|
|
|
|
|
|
Transactions with
owners
|
|
|
|
|
|
|
|
|
|
Dividends paid to equity
shareholders
|
5
|
-
|
-
|
-
|
-
|
(348)
|
(348)
|
-
|
(348)
|
Net movement in own shares
held
|
|
-
|
-
|
-
|
-
|
10
|
10
|
-
|
10
|
Share buyback
|
|
(1)
|
1
|
-
|
-
|
(281)
|
(281)
|
-
|
(281)
|
Dividends paid to non-controlling
interests
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(12)
|
(12)
|
Total transactions with
owners
|
|
(1)
|
1
|
-
|
-
|
(619)
|
(619)
|
(12)
|
(631)
|
Balance as at 2 March
2024
|
|
43
|
180
|
(178)
|
(10)
|
11,043
|
11,078
|
87
|
11,165
|
|
|
|
|
|
|
|
|
|
|
Balance as at 17 September
2022
|
|
45
|
178
|
422
|
154
|
10,649
|
11,448
|
106
|
11,554
|
Total comprehensive
income
|
|
|
|
|
|
|
|
|
|
Profit for the period recognised
in the income statement
|
|
-
|
-
|
-
|
-
|
527
|
527
|
15
|
542
|
Remeasurements of defined benefit
schemes
|
|
-
|
-
|
-
|
-
|
18
|
18
|
-
|
18
|
Deferred tax associated with
defined benefit schemes
|
|
-
|
-
|
-
|
-
|
(2)
|
(2)
|
-
|
(2)
|
Items that will not be
reclassified to profit or loss
|
|
-
|
-
|
-
|
-
|
16
|
16
|
-
|
16
|
Effect of movements in foreign
exchange
|
|
-
|
-
|
(164)
|
-
|
-
|
(164)
|
(15)
|
(179)
|
Net gain on hedge of net
investment in foreign subsidiaries
|
|
-
|
-
|
1
|
-
|
-
|
1
|
-
|
1
|
Movement in cash flow hedging
position
|
|
-
|
-
|
-
|
(271)
|
-
|
(271)
|
-
|
(271)
|
Deferred tax associated with
movement in cash flow hedging position
|
|
-
|
-
|
-
|
62
|
-
|
62
|
-
|
62
|
Share of other comprehensive
income of joint ventures and associates
|
|
-
|
-
|
(6)
|
-
|
-
|
(6)
|
-
|
(6)
|
Effect of hyperinflationary
economies
|
|
-
|
-
|
-
|
-
|
26
|
26
|
-
|
26
|
Items that are or may be
subsequently reclassified to profit or loss
|
|
-
|
-
|
(169)
|
(209)
|
26
|
(352)
|
(15)
|
(367)
|
Other comprehensive
income
|
|
-
|
-
|
(169)
|
(209)
|
42
|
(336)
|
(15)
|
(351)
|
Total comprehensive
income
|
|
-
|
-
|
(169)
|
(209)
|
569
|
191
|
-
|
191
|
|
|
|
|
|
|
|
|
|
|
Inventory cash flow hedge
movements
|
|
|
|
|
|
|
|
|
|
Amounts transferred to cost of
inventory
|
|
-
|
-
|
-
|
6
|
-
|
6
|
-
|
6
|
Total inventory cash flow hedge
movements
|
|
-
|
-
|
-
|
6
|
-
|
6
|
-
|
6
|
|
|
|
|
|
|
|
|
|
|
Transactions with
owners
|
|
|
|
|
|
|
|
|
|
Dividends paid to equity
shareholders
|
5
|
-
|
-
|
-
|
-
|
(235)
|
(235)
|
-
|
(235)
|
Net movement in own shares
held
|
|
-
|
-
|
-
|
-
|
(13)
|
(13)
|
-
|
(13)
|
Share buyback
|
|
-
|
-
|
-
|
-
|
(140)
|
(140)
|
-
|
(140)
|
Dividends paid to non-controlling
interests
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(6)
|
(6)
|
Total transactions with
owners
|
|
-
|
-
|
-
|
-
|
(388)
|
(388)
|
(6)
|
(394)
|
Balance as at 4 March
2023
|
|
45
|
178
|
253
|
(49)
|
10,830
|
11,257
|
100
|
11,357
|
|
|
|
|
|
|
|
|
|
|
Balance as at 17 September
2022
|
|
45
|
178
|
422
|
154
|
10,649
|
11,448
|
106
|
11,554
|
Total comprehensive
income
|
|
|
|
|
|
|
|
|
|
Profit for the period recognised
in the income statement
|
|
-
|
-
|
-
|
-
|
1,044
|
1,044
|
24
|
1,068
|
Remeasurements of defined benefit
schemes
|
|
-
|
-
|
-
|
-
|
(7)
|
(7)
|
-
|
(7)
|
Deferred tax associated with
defined benefit schemes
|
|
-
|
-
|
-
|
-
|
4
|
4
|
-
|
4
|
Items that will not be
reclassified to profit or loss
|
|
-
|
-
|
-
|
-
|
(3)
|
(3)
|
-
|
(3)
|
Effect of movements in foreign
exchange
|
|
-
|
-
|
(448)
|
-
|
-
|
(448)
|
(22)
|
(470)
|
Net gain on hedge of net
investment in foreign subsidiaries
|
|
-
|
-
|
1
|
-
|
-
|
1
|
-
|
1
|
Deferred tax associated with
movements in foreign exchange
|
|
-
|
-
|
(5)
|
-
|
-
|
(5)
|
|
(5)
|
Current tax associated with
movements in foreign exchange
|
|
-
|
-
|
6
|
-
|
-
|
6
|
|
6
|
Movement in cash flow hedging
position
|
|
-
|
-
|
-
|
(260)
|
-
|
(260)
|
-
|
(260)
|
Deferred tax associated with
movement in cash flow hedging position
|
|
-
|
-
|
-
|
40
|
-
|
40
|
-
|
40
|
Share of other comprehensive
income of joint ventures and associates
|
|
-
|
-
|
(18)
|
-
|
-
|
(18)
|
-
|
(18)
|
Effect of hyperinflationary
economies
|
|
-
|
-
|
-
|
-
|
40
|
40
|
-
|
40
|
Items that are or may be
subsequently reclassified to profit or loss
|
|
-
|
-
|
(464)
|
(220)
|
40
|
(644)
|
(22)
|
(666)
|
Other comprehensive
income
|
|
-
|
-
|
(464)
|
(220)
|
37
|
(647)
|
(22)
|
(669)
|
Total comprehensive
income
|
|
-
|
-
|
(464)
|
(220)
|
1,081
|
397
|
2
|
399
|
|
|
|
|
|
|
|
|
|
|
Inventory cash flow hedge
movements
|
|
|
|
|
|
|
|
|
|
Amounts transferred to cost of
inventory
|
|
-
|
-
|
-
|
68
|
-
|
68
|
-
|
68
|
Total inventory cash flow hedge
movements
|
|
-
|
-
|
-
|
68
|
-
|
68
|
-
|
68
|
|
|
|
|
|
|
|
|
|
|
Transactions with
owners
|
|
|
|
|
|
|
|
|
|
Dividends paid to equity
shareholders
|
5
|
-
|
-
|
-
|
-
|
(345)
|
(345)
|
-
|
(345)
|
Net movement in own shares
held
|
|
-
|
-
|
-
|
-
|
(28)
|
(28)
|
-
|
(28)
|
Share buyback
|
|
(1)
|
1
|
-
|
-
|
(448)
|
(448)
|
-
|
(448)
|
Deferred tax associated with
share-based payments
|
|
-
|
-
|
-
|
-
|
1
|
1
|
-
|
1
|
Dividends paid to non-controlling
interests
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(8)
|
(8)
|
Total transactions with
owners
|
|
(1)
|
1
|
-
|
-
|
(820)
|
(820)
|
(8)
|
(828)
|
Balance as at 16 September
2023
|
|
44
|
179
|
(42)
|
2
|
10,910
|
11,093
|
100
|
11,193
|
1. Operating segments
The Group has five operating
segments. These are the Group's operating divisions, based on the
management and internal reporting structure, which combine
businesses with common characteristics, primarily in respect of the
type of products offered by each business, but also the production
processes involved and the manner of the distribution and sale of
goods. The Board is the chief operating decision-maker.
Inter-segment pricing is
determined on an arm's length basis. Segment result is adjusted
operating profit, as shown on the face of the consolidated income
statement. Segment assets comprise all non-current assets except
employee benefits assets, income tax assets, deferred tax assets,
and all current assets except cash and cash equivalents, current
asset investments and income tax assets. Segment liabilities
comprise trade and other payables, derivative liabilities,
provisions and lease liabilities.
Segment results, assets and
liabilities include items directly attributable to a segment as
well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly corporate assets and expenses,
cash, borrowings, employee benefits balances and current and
deferred tax balances.
Segment non-current asset
additions are the total cost incurred during the period to acquire
segment assets that are expected to be used for more than one year,
comprising property, plant and equipment, right-of-use assets and
operating intangibles.
Businesses disposed, closed or to
be closed during the period are shown separately and comparatives
have been re-presented.
The Group is comprised of the
following operating segments:
Grocery
The manufacture of grocery
products, including hot beverages, sugar and sweeteners, vegetable
oils, balsamic vinegars, bread and baked goods, cereals, ethnic
foods, and meat products, which are sold to retail, wholesale and
foodservice businesses.
Ingredients
The manufacture of bakers' yeast,
bakery ingredients, enzymes, lipids, yeast extracts and cereal
specialities.
Agriculture
The manufacture of animal feeds
and the provision of other products and services for the
agriculture sector.
Sugar
The growing and processing of
sugar beet and sugar cane for sale to industrial users and to
Silver Spoon, which is included in the Grocery segment.
Retail
Buying and merchandising value
clothing and accessories through the Primark and Penneys retail
chains.
Geographical
information
In addition to the required
disclosure for operating segments, disclosure is also given of
certain geographical information about the Group's operations,
based on the geographical groupings: United Kingdom; Europe &
Africa; the Americas; and Asia Pacific.
Revenues are shown by reference to
the geographical location of customers. Profits are shown by
reference to the geographical location of the businesses. Segment
assets are based on the geographical location of the
assets.
|
Revenue
|
Adjusted operating profit
|
|
24 weeks
ended 2 March
2024
£m
|
24 weeks
ended 4 March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
24 weeks
ended 2 March
2024
£m
|
24 weeks
ended
4
March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
|
Operating segments
|
|
|
|
|
|
|
Grocery
|
2,124
|
2,105
|
4,198
|
230
|
173
|
448
|
Ingredients
|
1,056
|
1,088
|
2,157
|
117
|
102
|
214
|
Agriculture
|
850
|
950
|
1,840
|
14
|
12
|
41
|
Sugar
|
1,170
|
1,168
|
2,474
|
125
|
97
|
179
|
Retail
|
4,500
|
4,228
|
9,008
|
508
|
351
|
735
|
Central
|
-
|
-
|
-
|
(45)
|
(40)
|
(94)
|
|
9,700
|
9,539
|
19,677
|
949
|
695
|
1,523
|
Business to be closed
|
|
|
|
|
|
|
Sugar
|
34
|
21
|
73
|
2
|
(11)
|
(10)
|
|
9,734
|
9,560
|
19,750
|
951
|
684
|
1,513
|
Geographical information
|
|
|
|
|
|
|
United Kingdom
|
3,585
|
3,590
|
7,271
|
339
|
261
|
488
|
Europe & Africa
|
3,717
|
3,508
|
7,552
|
367
|
235
|
559
|
The Americas
|
1,248
|
1,219
|
2,420
|
213
|
160
|
353
|
Asia Pacific
|
1,150
|
1,222
|
2,434
|
30
|
39
|
123
|
|
9,700
|
9,539
|
19,677
|
949
|
695
|
1,523
|
Business to be closed
|
|
|
|
|
|
|
Asia Pacific
|
34
|
21
|
73
|
2
|
(11)
|
(10)
|
|
9,734
|
9,560
|
19,750
|
951
|
684
|
1,513
|
|
|
|
|
|
|
|
Operating segments for the 24
weeks ended 2 March 2024
|
Grocery
£m
|
Ingredients
£m
|
Agriculture
£m
|
Sugar
£m
|
Retail
£m
|
Central
£m
|
Total
£m
|
|
Revenue from continuing
businesses
|
2,134
|
1,159
|
852
|
1,230
|
4,500
|
(175)
|
9,700
|
Internal revenue
|
(10)
|
(103)
|
(2)
|
(60)
|
-
|
175
|
-
|
External revenue from continuing
businesses
|
2,124
|
1,056
|
850
|
1,170
|
4,500
|
-
|
9,700
|
Business to be closed
|
-
|
-
|
-
|
34
|
-
|
-
|
34
|
Revenue from external
customers
|
2,124
|
1,056
|
850
|
1,204
|
4,500
|
-
|
9,734
|
|
|
|
|
|
|
|
|
Operating profit
|
219
|
110
|
10
|
121
|
508
|
(37)
|
931
|
|
|
|
|
|
|
|
|
Adjusted operating profit before
joint ventures and associates
|
201
|
99
|
14
|
121
|
508
|
(45)
|
898
|
Share of adjusted profit after tax
from joint ventures and associates
|
29
|
18
|
-
|
4
|
-
|
-
|
51
|
Business to be closed
|
-
|
-
|
-
|
2
|
-
|
-
|
2
|
Adjusted operating
profit
|
230
|
117
|
14
|
127
|
508
|
(45)
|
951
|
Finance income
|
-
|
-
|
-
|
-
|
-
|
35
|
35
|
Finance expense
|
-
|
-
|
-
|
(1)
|
(43)
|
(18)
|
(62)
|
Other financial expense
|
-
|
-
|
-
|
-
|
-
|
(13)
|
(13)
|
Adjusted profit before
taxation
|
230
|
117
|
14
|
126
|
465
|
(41)
|
911
|
Profits less losses on disposal of
non-current assets
|
-
|
-
|
-
|
-
|
-
|
8
|
8
|
Amortisation of non-operating
intangibles
|
(10)
|
(6)
|
(4)
|
-
|
-
|
-
|
(20)
|
Acquired inventory fair value
adjustments
|
(1)
|
-
|
-
|
-
|
-
|
-
|
(1)
|
Transaction costs
|
-
|
(1)
|
-
|
-
|
-
|
-
|
(1)
|
Exceptional items
|
-
|
-
|
-
|
(6)
|
-
|
-
|
(6)
|
Profits less losses on sale and
closure of businesses
|
-
|
-
|
-
|
(10)
|
-
|
-
|
(10)
|
Profit before taxation
|
219
|
110
|
10
|
110
|
465
|
(33)
|
881
|
Taxation
|
-
|
-
|
-
|
-
|
-
|
(203)
|
(203)
|
Profit for the period
|
219
|
110
|
10
|
110
|
465
|
(236)
|
678
|
|
|
|
|
|
|
|
|
Segment assets (excluding joint
ventures and associates)
|
2,720
|
2,034
|
654
|
2,541
|
7,181
|
146
|
15,276
|
Investments in joint ventures and
associates
|
51
|
138
|
155
|
52
|
-
|
-
|
396
|
Segment assets
|
2,771
|
2,172
|
809
|
2,593
|
7,181
|
146
|
15,672
|
Cash and cash
equivalents
|
|
|
|
|
|
1,268
|
1,268
|
Income tax
|
|
|
|
|
|
92
|
92
|
Deferred tax assets
|
|
|
|
|
|
186
|
186
|
Employee benefits
assets
|
|
|
|
|
|
1,523
|
1,523
|
Segment liabilities
|
(672)
|
(371)
|
(183)
|
(617)
|
(4,120)
|
(187)
|
(6,150)
|
Loans and overdrafts
|
|
|
|
|
|
(600)
|
(600)
|
Income tax
|
|
|
|
|
|
(95)
|
(95)
|
Deferred tax
liabilities
|
|
|
|
|
|
(660)
|
(660)
|
Employee benefits
liabilities
|
|
|
|
|
|
(71)
|
(71)
|
Net assets
|
2,099
|
1,801
|
626
|
1,976
|
3,061
|
1,602
|
11,165
|
|
|
|
|
|
|
|
|
Non-current asset
additions
|
95
|
78
|
15
|
163
|
323
|
2
|
676
|
Depreciation and non-cash lease
adjustments
|
(48)
|
(32)
|
(11)
|
(43)
|
(266)
|
(3)
|
(403)
|
Amortisation
|
(12)
|
(6)
|
(5)
|
(1)
|
(17)
|
-
|
(41)
|
Operating segments for the 24
weeks ended 4 March 2023
|
Grocery
£m
|
Ingredients
£m
|
Agriculture
£m
|
Sugar
£m
|
Retail
£m
|
Central
£m
|
Total
£m
|
|
Revenue from continuing
businesses
|
2,117
|
1,194
|
953
|
1,229
|
4,228
|
(182)
|
9,539
|
Internal revenue
|
(12)
|
(106)
|
(3)
|
(61)
|
-
|
182
|
-
|
External revenue from continuing
businesses
|
2,105
|
1,088
|
950
|
1,168
|
4,228
|
-
|
9,539
|
Business to be closed
|
-
|
-
|
-
|
21
|
-
|
-
|
21
|
Revenue from external
customers
|
2,105
|
1,088
|
950
|
1,189
|
4,228
|
-
|
9,560
|
|
|
|
|
|
|
|
|
Operating profit
|
163
|
95
|
7
|
86
|
351
|
(39)
|
663
|
|
|
|
|
|
|
|
|
Adjusted operating profit before
joint ventures and associates
|
141
|
91
|
8
|
93
|
351
|
(40)
|
644
|
Share of adjusted profit after tax
from joint ventures and associates
|
32
|
11
|
4
|
4
|
-
|
-
|
51
|
Business to be closed
|
-
|
-
|
-
|
(11)
|
-
|
-
|
(11)
|
Adjusted operating
profit
|
173
|
102
|
12
|
86
|
351
|
(40)
|
684
|
Finance income
|
|
|
|
|
|
22
|
22
|
Finance expense
|
(1)
|
-
|
-
|
(1)
|
(39)
|
(18)
|
(59)
|
Other financial income
|
|
|
|
|
|
20
|
20
|
Adjusted profit before
taxation
|
172
|
102
|
12
|
85
|
312
|
(16)
|
667
|
Profits less losses on disposal of
non-current assets
|
1
|
-
|
-
|
-
|
-
|
1
|
2
|
Amortisation of non-operating
intangibles
|
(11)
|
(7)
|
(2)
|
-
|
-
|
-
|
(20)
|
Acquired inventory fair value
adjustments
|
-
|
-
|
(2)
|
-
|
-
|
-
|
(2)
|
Transaction costs
|
-
|
-
|
(1)
|
-
|
-
|
-
|
(1)
|
Profits less losses on sale and
closure of businesses
|
-
|
4
|
-
|
(6)
|
-
|
-
|
(2)
|
Profit before taxation
|
162
|
99
|
7
|
79
|
312
|
(15)
|
644
|
Taxation
|
|
|
|
|
|
(102)
|
(102)
|
Profit for the period
|
162
|
99
|
7
|
79
|
312
|
(117)
|
542
|
|
|
|
|
|
|
|
|
Segment assets (excluding joint
ventures and associates)
|
2,866
|
2,113
|
643
|
2,509
|
7,501
|
147
|
15,779
|
Investments in joint ventures and
associates
|
52
|
141
|
147
|
48
|
-
|
-
|
388
|
Segment assets
|
2,918
|
2,254
|
790
|
2,557
|
7,501
|
147
|
16,167
|
Cash and cash
equivalents
|
|
|
|
|
|
1,213
|
1,213
|
Current asset
investments
|
|
|
|
|
|
3
|
3
|
Income tax
|
|
|
|
|
|
91
|
91
|
Deferred tax assets
|
|
|
|
|
|
210
|
210
|
Employee benefits
assets
|
|
|
|
|
|
1,440
|
1,440
|
Segment liabilities
|
(696)
|
(391)
|
(190)
|
(670)
|
(4,193)
|
(187)
|
(6,327)
|
Loans and overdrafts
|
|
|
|
|
|
(630)
|
(630)
|
Income tax
|
|
|
|
|
|
(140)
|
(140)
|
Deferred tax
liabilities
|
|
|
|
|
|
(593)
|
(593)
|
Employee benefits
liabilities
|
|
|
|
|
|
(77)
|
(77)
|
Net assets
|
2,222
|
1,863
|
600
|
1,887
|
3,308
|
1,477
|
11,357
|
|
|
|
|
|
|
|
|
Non-current asset
additions
|
67
|
86
|
11
|
131
|
282
|
2
|
579
|
Depreciation and non-cash lease
adjustments
|
(57)
|
(30)
|
(9)
|
(47)
|
(239)
|
(4)
|
(386)
|
Amortisation
|
(13)
|
(7)
|
(3)
|
(1)
|
(15)
|
-
|
(39)
|
|
|
|
|
|
|
|
|
Operating segments for the 52
weeks ended 16 September 2023
|
Grocery
£m
|
Ingredients
£m
|
Agriculture
£m
|
Sugar
£m
|
Retail
£m
|
Central
£m
|
Total
£m
|
|
Revenue from continuing
businesses
|
4,222
|
2,366
|
1,849
|
2,591
|
9,008
|
(359)
|
19,677
|
Internal revenue
|
(24)
|
(209)
|
(9)
|
(117)
|
-
|
359
|
-
|
External revenue from external
customers
|
4,198
|
2,157
|
1,840
|
2,474
|
9,008
|
-
|
19,677
|
Business to be closed
|
-
|
-
|
-
|
73
|
-
|
-
|
73
|
Revenue from external
customers
|
4,198
|
2,157
|
1,840
|
2,547
|
9,008
|
-
|
19,750
|
|
|
|
|
|
|
|
-
|
Operating profit
|
402
|
201
|
32
|
119
|
717
|
(88)
|
1,383
|
|
|
|
|
|
|
|
-
|
Adjusted operating profit before
joint ventures and associates
|
368
|
190
|
25
|
172
|
735
|
(94)
|
1,396
|
Share of adjusted profit after tax
from joint ventures and associates
|
80
|
24
|
16
|
7
|
-
|
-
|
127
|
Business to be closed
|
-
|
-
|
-
|
(10)
|
-
|
-
|
(10)
|
Adjusted operating
profit
|
448
|
214
|
41
|
169
|
735
|
(94)
|
1,513
|
Finance income
|
|
|
|
|
|
48
|
48
|
Finance expense
|
(1)
|
(1)
|
-
|
(3)
|
(86)
|
(37)
|
(128)
|
Other financial income
|
|
|
|
|
|
40
|
40
|
Adjusted profit before
taxation
|
447
|
213
|
41
|
166
|
649
|
(43)
|
1,473
|
Profits less losses on disposal of
non-current assets
|
19
|
-
|
-
|
-
|
-
|
9
|
28
|
Amortisation of non-operating
intangibles
|
(23)
|
(13)
|
(5)
|
-
|
-
|
-
|
(41)
|
Acquired inventory fair value
adjustments
|
(1)
|
-
|
(2)
|
-
|
-
|
-
|
(3)
|
Transaction costs
|
-
|
-
|
(2)
|
-
|
-
|
(3)
|
(5)
|
Exceptional items
|
(41)
|
-
|
-
|
(50)
|
(18)
|
-
|
(109)
|
Profits less losses on sale and
closure of businesses
|
-
|
3
|
-
|
(6)
|
-
|
-
|
(3)
|
Profit before taxation
|
401
|
203
|
32
|
110
|
631
|
(37)
|
1,340
|
Taxation
|
|
|
|
|
|
(272)
|
(272)
|
Profit for the period
|
401
|
203
|
32
|
110
|
631
|
(309)
|
1,068
|
|
|
|
|
|
|
|
|
Segment assets (excluding joint
ventures and associates)
|
2,759
|
2,011
|
640
|
2,179
|
7,530
|
110
|
15,229
|
Investments in joint ventures and
associates
|
58
|
133
|
155
|
48
|
-
|
-
|
394
|
Segment assets
|
2,817
|
2,144
|
795
|
2,227
|
7,530
|
110
|
15,623
|
Cash and cash
equivalents
|
|
|
|
|
|
1,457
|
1,457
|
Income tax
|
|
|
|
|
|
125
|
125
|
Deferred tax assets
|
|
|
|
|
|
193
|
193
|
Employee benefits
assets
|
|
|
|
|
|
1,446
|
1,446
|
Segment liabilities
|
(689)
|
(407)
|
(196)
|
(501)
|
(4,326)
|
(166)
|
(6,285)
|
Loans and overdrafts
|
|
|
|
|
|
(562)
|
(562)
|
Income tax
|
|
|
|
|
|
(109)
|
(109)
|
Deferred tax
liabilities
|
|
|
|
|
|
(626)
|
(626)
|
Employee benefits
liabilities
|
|
|
|
|
|
(69)
|
(69)
|
Net assets
|
2,128
|
1,737
|
599
|
1,726
|
3,204
|
1,799
|
11,193
|
|
|
|
|
|
|
|
|
Non-current asset
additions
|
154
|
174
|
20
|
289
|
711
|
4
|
1,352
|
Depreciation and non-cash lease
adjustments
|
(114)
|
(62)
|
(19)
|
(75)
|
(526)
|
(8)
|
(804)
|
Amortisation
|
(26)
|
(15)
|
(7)
|
(3)
|
(31)
|
-
|
(82)
|
Geographical information for the
24 weeks ended 2 March 2024
|
United
Kingdom
£m
|
Europe
& Africa
£m
|
The
Americas
£m
|
Asia
Pacific
£m
|
Total
£m
|
Revenue from external
customers
|
3,585
|
3,717
|
1,248
|
1,184
|
9,734
|
Segment assets
|
5,850
|
6,530
|
1,775
|
1,517
|
15,672
|
Non-current asset
additions
|
171
|
348
|
83
|
74
|
676
|
Depreciation (including of
right-of-use assets)
|
(147)
|
(187)
|
(43)
|
(26)
|
(403)
|
Amortisation
|
(9)
|
(29)
|
(2)
|
(2)
|
(42)
|
Acquired inventory fair value
adjustments
|
-
|
(1)
|
-
|
-
|
(1)
|
Transaction costs
|
-
|
(1)
|
-
|
-
|
(1)
|
Exceptional items
|
(18)
|
12
|
-
|
-
|
(6)
|
Geographical information for the 24
weeks ended 4 March 2023
|
United
Kingdom
£m
|
Europe
& Africa
£m
|
The
Americas
£m
|
Asia
Pacific
£m
|
Total
£m
|
Revenue from external
customers
|
3,590
|
3,508
|
1,219
|
1,243
|
9,560
|
Segment assets
|
5,916
|
6,744
|
1,803
|
1,704
|
16,167
|
Non-current asset
additions
|
143
|
292
|
105
|
39
|
579
|
Depreciation (including of
right-of-use assets)
|
(136)
|
(175)
|
(41)
|
(34)
|
(386)
|
Amortisation
|
(8)
|
(26)
|
(2)
|
(3)
|
(39)
|
Acquired inventory fair value
adjustments
|
(2)
|
-
|
-
|
-
|
(2)
|
Transaction costs
|
(1)
|
-
|
-
|
-
|
(1)
|
Geographical information for the 52
weeks ended 16 September 2023
|
United
Kingdom
£m
|
Europe
& Africa
£m
|
The
Americas
£m
|
Asia
Pacific
£m
|
Total
£m
|
Revenue from external
customers
|
7,271
|
7,552
|
2,420
|
2,507
|
19,750
|
Segment assets
|
5,690
|
6,651
|
1,792
|
1,490
|
15,623
|
Non-current asset
additions
|
305
|
732
|
217
|
98
|
1,352
|
Depreciation (including of
right-of-use assets)
|
(279)
|
(374)
|
(84)
|
(67)
|
(804)
|
Amortisation
|
(17)
|
(56)
|
(4)
|
(5)
|
(82)
|
Acquired inventory fair value
adjustments
|
(2)
|
(1)
|
-
|
-
|
(3)
|
Transaction costs
|
(4)
|
(1)
|
-
|
-
|
(5)
|
Exceptional items
|
-
|
(53)
|
-
|
(56)
|
(109)
|
The Group's operations in the
following countries met the criteria for separate
disclosure:
|
Revenue
|
Non-current assets
|
|
24 weeks
ended 2 March
2024
£m
|
24 weeks
ended 4 March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
24 weeks
ended 2 March
2024
£m
|
24 weeks
ended 4 March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
|
Australia
|
687
|
705
|
1,407
|
571
|
606
|
541
|
Spain
|
991
|
880
|
1,836
|
694
|
647
|
651
|
United States
|
833
|
806
|
1,580
|
893
|
854
|
887
|
All segment disclosures are stated
before reclassification of assets and liabilities classified as
held for sale.
2. Exceptional items
2024
At half year, there was a non-cash
exceptional impairment charge of £6m in our Sugar Division. The
Vivergo business has been impacted by the volatility in margin and
an impairment was recognised of £17m against property, plant and
equipment and £1m against right-of-use assets. This was partially
offset by a partial reversal of the impairment recognised in the
Maragra Sugar business in Mozambique at the end of the 2023
financial year where market valuations indicate in the first half
of this half year a resale value of £12m on the impaired property,
plant and equipment. The impairment of £35m in Maragra in 2023 was
due to severe flooding and damage to the sugar crop fields and
included the full write down of £25m against property, plant and
equipment, £7m against current biological assets, £2m provided for
personnel costs and a £1m write down of inventory .
2023
At half year, there were no
exceptional items. For the full year, a non-cash exceptional
impairment charge was included of £109m specifically £41m for the
Don business in the Grocery segment, £50m for the Sugar segment
including £15m for China North Sugar and £35m for Maragra, and £18m
for the Retail segment relating to the German Primark store
portfolio.
3. Income tax expense
|
24 weeks
ended
2
March
2024
£m
|
24 weeks
ended
4
March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
|
Current tax expense
|
|
|
|
UK - corporation tax at 25% (2023
- 21.8%)
|
21
|
23
|
26
|
Overseas - corporation
tax
|
147
|
112
|
249
|
UK - over provided in prior
years
|
-
|
(7)
|
(14)
|
Overseas - (over)/under provided
in prior years
|
(3)
|
-
|
18
|
|
165
|
128
|
279
|
Deferred tax expense
|
|
|
|
UK - deferred tax
|
34
|
12
|
54
|
Overseas - deferred tax
|
3
|
20
|
28
|
UK - over provided in prior
years
|
-
|
-
|
(26)
|
Overseas - under/(over) provided
in prior years
|
1
|
(58)
|
(63)
|
|
38
|
(26)
|
(7)
|
Total income tax expense in the
income statement
|
203
|
102
|
272
|
|
|
|
|
Reconciliation of effective tax
rate
|
|
|
|
Profit before taxation
|
881
|
644
|
1,340
|
Less share of profit after
taxation from joint ventures and associates
|
(49)
|
(50)
|
(124)
|
Profit before taxation excluding
share of profit after taxation from joint ventures and
associates
|
832
|
594
|
1,216
|
|
|
|
|
Nominal tax charge at UK
corporation tax rate of 25% (2023 - 21.8%)
|
208
|
129
|
265
|
Effect of higher and lower tax
rates on overseas earnings
|
(43)
|
-
|
(16)
|
Effect of changes in tax rates on
the income statement
|
1
|
2
|
5
|
Expenses not deductible for tax
purposes
|
39
|
28
|
66
|
Disposal of assets covered by tax
exemptions or unrecognised capital losses
|
3
|
1
|
(2)
|
Deferred tax not
recognised
|
(3)
|
7
|
39
|
Adjustments in respect of prior
periods
|
(2)
|
(65)
|
(85)
|
|
203
|
102
|
272
|
|
|
|
|
Other comprehensive income or
equity
|
|
|
|
Deferred tax associated with
defined benefit schemes
|
17
|
2
|
(4)
|
Deferred tax associated with
share-based payments
|
-
|
-
|
(1)
|
Deferred tax associated with
movements in cash flow hedging position
|
(4)
|
(62)
|
(40)
|
Deferred tax associated with
movements in foreign exchange
|
-
|
-
|
5
|
Current tax associated with
movements in foreign exchange
|
-
|
-
|
(6)
|
|
13
|
(60)
|
(46)
|
The adjusted effective tax rate of
23.2% (2023 half year - 24.7%) is the estimated weighted average
annual tax rate based on full year projections and was applied to
profit before adjusting items for the 24 weeks ended 2 March 2024.
The tax impact of adjusting items was calculated on an item-by-item
basis. In the prior half year a £58m exceptional tax credit was
recognised in relation to deferred tax asset recognition in
Germany. The UK corporation tax rate of 19% increased to 25% from 1
April 2023.
As in the prior year, the Group
considers a provision is not required in relation to the EU State
Aid ruling on the UK's controlled foreign company legislation based
on our assessment of the issue. The ruling is currently being
appealed in the Court of Justice of the European Union ('CJEU').
The maximum potential liability is £26m (2023 half and full year -
£26m).
Pillar Two legislation has been
enacted or substantively enacted in certain jurisdictions in which
the Group operates, including the UK. The legislation will be
effective for the Group's 2025 financial year. The Group has
performed an assessment of the Group's potential exposure to Pillar
Two income taxes. This assessment is based on data available from
the Group's 2023 consolidated financial statements and the 2023
financial year Country-by Country Report. Based on the assessment,
the Pillar Two effective tax rates in most of the jurisdictions in
which the Group operates are above 15%. However, there are a
limited number of jurisdictions where the transitional safe harbour
relief does not apply. Of these jurisdictions, the most noteworthy
is Ireland, where the statutory tax rate is 12.5%, but where there
will be a local top up tax to 15%. Based on a high-level
assessment, the impact in 2023 of Pillar 2 on the ABF adjusted
effective tax rate would have been less than 1%. The Pillar 2
legislation is complex and still evolving. We will continue to
monitor the impact of future developments.
The Group recognises the
importance of complying fully with all applicable tax laws as well
as paying and collecting the right amount of tax in every country
in which the Group operates. The Group's board-approved tax
strategy is based on seven tax principles embedded in the Group's
financial and non financial processes and controls. This tax
strategy is available in the Policies section of the Group's
website.
4. Earnings per share
|
24 weeks
ended
2
March
2024
pence
per share
|
24 weeks
ended
4
March
2023
pence
per share
|
52 weeks
ended 16 September 2023
pence
per share
|
|
Adjusted earnings per
share
|
90.4
|
62.0
|
141.8
|
Disposal of non-current
assets
|
1.1
|
0.3
|
3.6
|
Sale and closure of
businesses
|
(1.4)
|
(0.3)
|
(0.4)
|
Acquired inventory fair value
adjustments
|
(0.1)
|
(0.3)
|
(0.4)
|
Transaction costs
|
(0.2)
|
(0.1)
|
(0.6)
|
Exceptional items
|
(0.8)
|
-
|
(14.0)
|
Tax effect on above adjustments
and exceptional tax
|
0.3
|
7.4
|
8.2
|
Amortisation of non-operating
intangibles
|
(2.6)
|
(2.5)
|
(5.3)
|
Tax credit on non-operating
intangibles amortisation
|
0.7
|
0.5
|
1.3
|
Earnings per ordinary
share
|
87.4
|
67.0
|
134.2
|
5. Dividends
|
24 weeks
ended 2 March
2024
pence
per share
|
24 weeks
ended 4 March
2023
pence
per share
|
52 weeks
ended 16 September 2023
pence
per share
|
24 weeks
ended 2 March
2024
£m
|
24 weeks
ended 4 March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
|
2022 final
|
-
|
29.9
|
29.9
|
-
|
235
|
235
|
2023 interim
|
-
|
-
|
14.2
|
-
|
-
|
110
|
2023 final and special
|
45.8
|
-
|
-
|
348
|
-
|
-
|
|
45.8
|
29.9
|
44.1
|
348
|
235
|
345
|
The 2023 final dividend of
33.1p approved by shareholders on 8 December 2023, together
with the special dividend of 12.7p totalled £348m when paid on 12
January 2024. The 2024 interim dividend of 20.7p
per share, totalling an estimated cost of £155m will be paid
on 5 July 2024 to shareholders on the register on 31 May
2024.
6. Assets and liabilities
classified as held for sale
The Group has no assets and
liabilities classified as held for sale in 2024.
In the prior half year period, the
Group disclosed its China North Sugar business as held for sale on
the expectation the business was to be disposed. This business was
not disposed but instead is now set to close (see note 7). As part
of this disclosure last year, £92m of assets were classified as
held for sale comprising inventories, property, plant and
equipment, operating intangibles, trade and other receivables and a
deferred tax asset and £26m of liabilities classified as held for
sale comprised of trade and other payables.
7. Acquisitions and
disposals
Acquisitions
2024
AB World Foods in our Grocery
segment, acquired the UK business Capsicana, provider of Latin
American products including tortillas, pastes, kits and seasoning
mixes. Total consideration for this transaction
was £11m, comprising £3m cash consideration and £8m deferred
consideration. Net assets acquired included non-operating
intangible assets of £12m, with related deferred tax of £3m and £1m
of other operating liabilities. Goodwill of £3m resulted from this
acquisition.
2023
In the first half, the Agriculture
division acquired Kite Consulting, Advance Sourcing and Progres.
Kite Consulting is a specialist dairy consultant and Advance
Sourcing provides specialist products to create value by
improving herd performance and supports dairy farmers to improve
herd efficiency and build resilience across the agri-food
supply chain. Progres in Finland uses a patented additive to
support good health, reduce inflammation and stimulate recovery,
which improves gut integrity and the performance of
animals.
In April, the Ingredients division
acquired Vital Solutions, a German company specialising in natural
science-based ingredients for application in dietary supplements
and functional foods.
The Agriculture division acquired
IFCN AG, a dairy research and consulting company in June and in
August acquired National Milk Records plc (NMR) for £48m. NMR is
the leading agri-tech supplier of management information and
testing services to the UK dairy supply chain, developing
technology used to inform farming efficiency and animal welfare,
and quantify food provenance.
Pre-acquisition carrying amounts
were the same as recognised values on acquisition apart from £32m
of non-operating intangibles in respect of brands, technology and
customer relationships, a £7m related deferred tax liability, a £6m
uplift to the investment in joint ventures and goodwill of £39m.
Cash flow on acquisition of subsidiaries, joint ventures and
associates of £94m comprised £78m cash consideration less £1m cash
and overdrafts acquired, £16m of deferred consideration relating to
previous acquisitions and a £1m contribution to an existing joint
venture in China.
Disposals
2024
A non-cash provision of £10m was
included in profit less losses on sale and closure of business for
the closure of the Group's China North Sugar business.
2023
The Group agreed to sell property,
plant and equipment to its Chinese joint venture partner. Profit on
sale was £3m for the full year (2023 half year - £4m).
In March 2023, Gledhow, the
Group's 30% equity-accounted associate in Illovo South Africa
formally went into business rescue. A non-cash provision of £6m was
booked on the financial guarantee held on this business'
liabilities.
8. Analysis of net debt
|
At 16
September 2023
£m
|
Cash
flow
£m
|
New
leases, non-cash items and transfers
£m
|
Exchange
adjustments
£m
|
At 2
March 2024
£m
|
|
Short-term loans
|
(99)
|
(11)
|
-
|
1
|
(109)
|
Long-term loans
|
(394)
|
(41)
|
-
|
3
|
(432)
|
Lease liabilities
|
(3,160)
|
160
|
(180)
|
16
|
(3,164)
|
Total liabilities from financing
activities
|
(3,653)
|
108
|
(180)
|
20
|
(3,705)
|
Cash at bank and in hand, cash
equivalents and overdrafts
|
1,388
|
(109)
|
-
|
(70)
|
1,209
|
Net debt including lease
liabilities
|
(2,265)
|
(1)
|
(180)
|
(50)
|
(2,496)
|
Cash and cash equivalents comprise
bank and cash balances, deposits and short-term investments with
original maturities of three months or less. £59m (2023 half year -
£133m; 2023 full year - £69m) of bank overdrafts that are repayable
on demand form part of the Group's cash management and are included
as a component of cash and cash equivalents for the purpose of the
cash flow statement.
Net cash before lease liabilities
is £668m, comprising cash at bank and in hand, cash equivalents and
overdrafts of £1,209m, short-term loans of £109m, long-term
loans of £432m and current asset investments of £nil (2023 half
year - £586m, £1,080m, £17m, £480m and £3m respectively;
2023 full year - £895m, £1,388m, £99m, £394m and £nil
respectively).
£59m (2023 half year - £133m; 2023
full year - £69m) of bank overdrafts plus the £109m (2023 half year
- £17m; 2023 full year - £99m) of short-term loans shown above
comprise the £168m (2023 half year - £150m; 2023 full year - £168m)
of current loans and overdrafts shown on the face of the balance
sheet.
Current and non-current lease
liabilities shown on the face of the balance sheet of £345m and
£2,819m respectively (2023 half year - £322m and £2,865m
respectively; 2023 full year - £335m and £2,825m respectively)
comprise the £3,164m (2023 half year - £3,187m; 2023 full year -
£3,160m) of lease liabilities shown above.
Current asset investments comprise
term deposits and short-term investments with original maturities
of greater than three months.
Interest paid is included within
financing activities. The roll-forward of the liabilities
associated with interest paid is an opening balance of £(25)m,
expense of £(62)m, payments of £55m, effect of hyperinflationary
economies of £3m and a closing balance of £(29)m (2023 half year:
opening balance of £(18)m, expense of £(59)m, payments of £57m,
interest on the interest rate swap £(5)m and a closing balance of
£(25)m; 2023 full year: opening balance of £(18)m, expense of
£(128)m, payments of £118m, effect of hyperinflationary economies
£3m and a closing balance of £(25)m).
9.
Related parties
Transactions between the Company
and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this note.
Full details of the Group's other related party relationships,
transactions and balances are given in the Group's financial
statements for the 52 weeks ended 16 September 2023. There have
been no material changes in these relationships in the 24 weeks
ended 2 March 2024 or up to the date of this report. No related
party transactions have taken place in the first 24 weeks of the
current financial year that have materially affected the financial
position or the performance of the Group during that
period.
10. Defined benefit pension
schemes
Employee benefits assets primarily
comprise the accounting surplus of the Group's UK defined benefit
scheme. At the end of the period, the surplus in the UK was £1,476m
(2023 half and full year - £1,397m). The increase from the end of
the last financial year reflects positive asset returns and a
decrease in long term expected inflation, partially offset by an
increase in the liabilities due to a decrease in corporate bond
yields.
Under the UK Pensions Act and
Regulation requirements, a court case outcome on 16 June 2023
involving Virgin Media has revealed potential challenges with other
previously contracted-out defined benefit schemes in the UK. This
development may cast doubt on the validity of scheme changes made
between 1997 and 2016, where those changes were not accompanied by
appropriate actuarial certificates.
The ABF UK pension scheme was
contracted out during this period and made amendments that
potentially impacted members' benefits. Until completion of a full
analysis of the scheme changes undertaken during this period the
company is unable to determine whether there is any impact or if
this could be reliably estimated.
11. Basis of
preparation
Associated British Foods plc ('the
Company') is a company domiciled in the United Kingdom. The
condensed consolidated interim financial statements of the Company
for the 24 weeks ended 2 March 2024 comprise those of the Company
and its subsidiaries (together referred to as 'the Group') and the
Group's interests in joint ventures and associates. In the prior
half year, the share buyback was shown as a movement in other
reserves. This has been re-presented as a movement in retained
earnings in line with the treatment for the full year.
The consolidated financial
statements of the Group for the 52 weeks ended 16 September
2023 are available upon request from the Company's registered
office at 10 Grosvenor Street, London, W1K 4QY or at
www.abf.co.uk.
The condensed consolidated interim
financial statements have been prepared in accordance with
UK-adopted IAS 34 Interim
Financial Reporting. They do not include all of the
information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements for the 52 weeks ended 16 September 2023.
After making enquiries, the
directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence to
the end of the 2025 financial year. For this reason, they
continue to adopt the going concern basis in preparing the
consolidated interim financial statements.
The directors have reviewed a
detailed cash flow forecast to the end of the 2025 financial year.
Having reviewed this forecast and having applied a downside
sensitivity analysis and performed a reverse stress test, the
directors consider it a remote possibility that the financial
headroom could be exhausted.
The Board's treasury policies are
in place to maintain a strong capital base and manage the Group's
balance sheet and liquidity to ensure long-term financial
stability. These policies are the basis for investor, creditor and
market confidence and enable the successful development of the
business. The financial leverage policy requires that, in the
ordinary course of business, the Board prefers to see the Group's
ratio of net debt including lease liabilities to adjusted EBITDA to
be well under 1.5x. At the end of this financial period, the
financial leverage ratio was 0.9x and the Group had total cash of
£1.3bn and an undrawn committed Revolving Credit Facility of
£1.5bn.
In March 2023, S&P Global
Ratings reaffirmed their assignment to the Group of an 'A' grade
long-term issuer credit rating. The Group's
funding basis is supported by the existing £400m public bond due in
2034. Furthermore the Group's committed Revolving
Credit Facility is free of performance covenants and matures in
2029, after a further one year extension was made in April 2024.
The $100m of outstanding private placement notes were repaid on 2
April 2024 after which point Group funding is not subject to
financial performance covenants.
In reviewing the cash flow forecast
for the period, the directors reviewed the trading for both Primark
and the food businesses in light of the experience gained from
events of the last three years of trading and emerging trading
patterns. The directors have a thorough understanding of the risks,
sensitivities and judgements included in these elements of the cash
flow forecast and have a high degree of confidence in these cash
flows.
As a downside scenario the
directors considered the adverse scenario in which inflationary
costs are not fully recovered, there are adverse foreign exchange
impacts, operations are materially impacted by extreme weather
events and there is a global recession, reducing demand for goods
further than the base levels forecast. This downside scenario was
modelled without taking any mitigating actions within their
control. Under this downside scenario the Group forecasts liquidity
throughout the period.
In addition, the directors also
considered the circumstances which would be needed to exhaust the
Group's total liquidity over the assessment period - a reverse
stress test. This indicates that, on top of the downside scenario
outlined above, cost inflation would need to exceed £2.7bn over the
going concern period without any price increases or other
mitigating actions being taken before total liquidity is exhausted.
The likelihood of these circumstances is considered remote for two
reasons. Firstly, over such a long period, management could take
substantial mitigating actions, such as reviewing pricing, cost
cutting measures and reducing capital investment. Secondly, the
Group has significant business and asset diversification and would
be able to, if it were necessary, dispose of assets and/or
businesses to raise considerable levels of funds.
The Group's business activities,
together with the factors likely to affect its future development,
performance and position are set out in the Operating Review. Note
26 on pages 166 to 177 of the 2023 Annual Report provides details
of the Group's policy on managing its financial and commodity
risks.
The 24 week period for the
condensed consolidated interim financial statements of the Company
means that the second half of the year is usually a 28 week period,
and the two halves of the reporting year are therefore not of equal
length. For the Retail segment, Christmas, falling in the first
half of the year, is a particularly important trading period. For
the Sugar segment, the balance sheet, and working capital in
particular, is strongly influenced by seasonal growth patterns for
both sugar beet and sugar cane, which vary significantly in the
markets in which the Group operates.
The condensed consolidated interim
financial statements are unaudited but have been subject to an
independent review by the auditor and were approved by the board of
directors on 23 April 2024. They do not constitute statutory
financial statements as defined in section 434 of the Companies Act
2006. The comparative figures for the 52 weeks ended 16 September
2023 have been abridged from the Group's 2023 financial statements
and are not the Company's statutory financial statements for that
period. Those financial statements have been reported on by the
Company's auditor for that period and delivered to the Registrar of
Companies. The report of the auditor was unqualified, did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
did not contain a statement under section 498(2) or (3) of the
Companies Act 2006.
This Interim Results Announcement
has been prepared solely to provide additional information to
shareholders as a body, to assess the Group's strategies and the
potential for those strategies to succeed. This Interim Results
Announcement should not be relied upon by any other party or for
any other purpose.
12. Significant accounting
policies
Except where detailed otherwise,
the accounting policies applied by the Group in these condensed
consolidated interim financial statements are substantially the
same as those applied by the Group in its consolidated financial
statements for the 52 weeks ended 16 September 2023 including for
derivatives and current biological assets, which are recognised in
the balance sheet at fair value and fair value less costs to sell,
respectively. The methodology for selecting assumptions
underpinning the fair value calculations has not changed since
16 September 2023.
New accounting
standards
The following accounting
standards, amendments and clarifications were adopted in the period
with no significant impact:
- International Tax Reform - Pillar Two Model Rules
(Amendments to IAS 12)
(refer to note 3)
- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to
IAS 12)
- Definition of Accounting Estimates (Amendments to IAS 8)
- Disclosure of Accounting policies (Amendments to IAS 1 and IFRS Practice
Statement 2)
- IFRS 17 Insurance
Contracts, Amendments to IFRS 17, Initial Application of
IFRS 17 and IFRS 9 - Comparative Information
Accounting standards not yet
applicable
The Group is assessing the impact
of the following standards, interpretations and amendments that are
not yet effective. Where already endorsed by the UK Endorsement
Board (UKEB), these changes will be adopted on the effective dates
noted. Where not yet endorsed by the UKEB, the adoption date is
less certain:
|
Lease Liability in a Sale and
Leaseback (Amendments to IFRS 16) effective 2025 financial
year
|
|
Amendments to IAS 1 Presentation
of Financial Statements effective 2025 financial year
|
|
Supplier Finance Arrangements
(Amendments to IAS 7 and IFRS 7), effective 2025 financial
year
|
|
Amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates: Lack of Exchangeability, effective 2026 financial
year (not yet endorsed by the UKEB).
|
13. Accounting estimates and
judgements
The preparation of interim
financial statements requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates. In
preparing the condensed consolidated interim financial statements,
the significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the consolidated
financial statements for the 52 weeks ended 16 September
2023.
14. Alternative performance
measures
In reporting financial
information, the Board uses various alternative performance
measures ('APMs') which it believes provide useful additional
information for understanding the financial performance and
financial health of the Group. These APMs should be considered in
addition to IFRS measures and are not intended to be a substitute
for them. Since IFRS does not define APMs, they may not be directly
comparable to similar measures used by other companies.
The Board also uses APMs to
improve the comparability of information between reporting periods
and geographical units (such as like-for-like sales) by adjusting
for non-recurring or uncontrollable factors which affect IFRS
measures, to aid users in understanding the Group's
performance.
Consequently, the Board and
management use APMs for performance analysis, planning, reporting
and incentive-setting.
APM
|
Closest equivalent IFRS
measure
|
Definition/purpose
|
Reconciliation/calculation
|
Like-for-like sales
|
No direct equivalent
|
The like-for-like sales metric
enables measurement of the performance of our retail stores on a
comparable year-on-year basis.
This measure represents the change
in sales at constant currency in our retail stores adjusted for new
stores, closures and relocations. Refits, extensions and downsizes
are also adjusted for if a store's retail square footage changes by
10% or more. For each change described above, a store's sales are
excluded from like-for-like sales for one year.
No adjustments are made for
disruption during refits, extensions or downsizes if a store's
retail square footage changes by less than 10%, for cannibalisation
by new stores or for the timing of national or bank
holidays.
It is measured against comparable
trading days in each period.
|
Consistent with the definition
given
|
Adjusted operating (profit)
margin
|
No direct equivalent
|
Adjusted operating (profit) margin
is adjusted operating profit as a percentage of revenue.
|
See note A
|
Adjusted operating
profit
|
Operating profit
|
Adjusted operating profit is
stated before amortisation of non-operating intangibles,
transaction costs, amortisation of fair value adjustments made to
acquired inventory, profits less losses on disposal of non-current
assets and exceptional items.
Items defined above which arise in
the Group's joint ventures and associates are also treated as
adjusting items for the purposes of adjusted operating
profit.
|
A reconciliation of this measure
is provided on the face of the condensed consolidated income
statement and by operating segment in note 1
|
Adjusted profit before
taxation
|
Profit before tax
|
Adjusted profit before taxation is
stated before amortisation of non-operating intangibles,
transaction costs, amortisation of fair value adjustments made to
acquired inventory, profits less losses on disposal of non-current
assets, exceptional items and profits less losses on sale and
closure of businesses.
Items defined above which arise in
the Group's joint ventures and associates are also treated as
adjusting items for the purposes of adjusted profit before
taxation.
|
A reconciliation of this measure
is provided on the face of the condensed consolidated income
statement and by operating segment in note 1
|
Adjusted earnings per
share
|
Earnings per share
|
Adjusted earnings per share is
stated before amortisation of non-operating intangibles,
transaction costs, amortisation of fair value adjustments made to
acquired inventory, profits less losses on disposal of non-current
assets, exceptional items and profits less losses on sale and
closure of businesses together with the related tax
effect.
Items defined above which arise in
the Group's joint ventures and associates are also treated as
adjusting items for the purposes of adjusted earnings per
share.
|
Reconciliation of this measure is
provided in note 4
|
Exceptional items
|
No direct equivalent
|
Exceptional items are items of
income and expenditure which are material and unusual in nature and
are considered of such significance that they require separate
disclosure on the face of the condensed income
statement.
|
Exceptional items are included on
the face of the condensed consolidated income statement with
further detail provided in note 2
|
Constant currency
|
Revenue and adjusted operating
profit (non-IFRS) measure
|
Constant currency measures are
derived by translating the relevant prior year figures at current
year average exchange rates, except for countries where CPI has
escalated to extreme levels, in which case actual exchange rates
are used. There are currently three countries where the Group has
operations in this position - Argentina, Venezuela and
Turkey.
|
See note B
|
Effective tax rate
|
Income tax expense
|
The effective tax rate is the tax
charge for the period expressed as a percentage of profit before
tax.
|
Whilst the effective tax rate is
not disclosed, a reconciliation of the tax charge on profit before
tax at the UK corporation tax rate to the actual tax charge is
provided in note 3
|
Adjusted effective tax
rate
|
No direct equivalent
|
The adjusted effective tax rate is
the tax charge for the period excluding tax on adjusting items
expressed as a percentage of adjusted profit before tax.
|
The tax impact of reconciling
items between profit before tax and adjusted profit before tax is
shown in note 3
|
Dividend cover
|
No direct equivalent
|
Dividend cover is the ratio of
adjusted earnings per share to dividends per share relating to the
period.
|
See note C
|
Capital expenditure
|
No direct equivalent
|
Capital expenditure is a measure
of investment each period in non-current assets in existing
businesses. It comprises cash outflows from the purchase of
property, plant and equipment and intangibles.
|
See note D
|
Gross investment
|
No direct equivalent
|
Gross investment is a measure of
investment each period in non-current assets of existing businesses
and acquisitions of new businesses. It includes capital expenditure
as well as cash outflows from the purchase of subsidiaries, joint
ventures and associates, additional shares in subsidiary
undertakings purchased from non-controlling interests and other
investments, as well as net debt assumed in
acquisitions.
|
See note E
|
Net cash/debt before lease
liabilities
|
No direct equivalent
|
This measure comprises cash, cash
equivalents and overdrafts, current asset investments and
loans.
|
A reconciliation of this measure
is shown in note 8
|
Net cash/debt including lease
liabilities
|
No direct equivalent
|
This measure comprises cash, cash
equivalents and overdrafts, current asset investments, loans and
lease liabilities.
|
A reconciliation of this measure
is shown in note 8
|
Adjusted EBITDA
|
See Adjusted operating profit
(non-IFRS) measure
|
Adjusted EBITDA is stated before
depreciation, amortisation and impairment charged to adjusted
operating profit.
|
See note F
|
Financial leverage
ratio
|
No direct equivalent
|
Financial leverage is the ratio of
net cash/debt including lease liabilities to adjusted EBITDA based
on the last 12 months rolling adjusted EBITDA.
|
See note F
|
Free cash flow
|
No direct equivalent
|
This measure represents the cash
that the Group generates from its operations after maintaining
and investing in its capital assets.
All the items below Adjusted
EBITDA can be found on the face of the cash flow statement or
derived directly from it.
Working capital comprises the
movements in inventories, receivables and payables within net cash
generated from operating activities.
Net interest paid is the sum of
interest received within net cash used in investing activities
and interest paid within net cash used in
financing activities.
Share of adjusted profit after tax
from joint ventures and associates is the amount on the
face of the cash flow statement, plus the £2m (2023 half year
- £1m; 2023 full year - £3m) non-operating intangible
amortisation which is not included in Adjusted EBITDA.
Other includes all other items
from net cash generated from operating activities and net cash used
in investing activities except for the purchase and sale of
subsidiaries, joint ventures and associates, plus dividends paid to
non-controlling interests and the movement from changes in own
shares held.
|
See note G
|
Total liquidity
|
No direct equivalent
|
Total liquidity comprises cash at
bank and in hand and cash equivalents less current loans and
overdrafts, and an estimate of inaccessible cash, plus the undrawn
RCF.
Cash at bank and in hand and cash
equivalents and current loans and overdrafts are set out in note
8.
Inaccessible cash is generally
located in jurisdictions where there is limited access to foreign
currency or where there are exchange controls. It is estimated at
5% of cash at bank and in hand and cash equivalents.
The RCF is long-term, legally
committed and contains no performance covenants.
|
See note H
|
(Average) capital
employed
|
No direct equivalent
|
Capital employed is derived from
the management balance sheet and does not reconcile directly to the
Group balance sheet. All elements of capital employed are
calculated in accordance with UK-adopted IFRS.
Average capital employed for each
segment and the Group is calculated by averaging the capital
employed for each period of the financial year based on the
reporting calendar of each business.
|
Consistent with the definition
given
|
Return on (average) capital
employed
|
No direct equivalent
|
The return on (average) capital
employed measure divides annualised adjusted operating profit by
average capital employed.
|
Consistent with the definition
given
|
(Average) working
capital
|
No direct equivalent
|
Working capital is derived from
the management balance sheet and does not reconcile directly to the
Group balance sheet. All elements of working capital are calculated
in accordance with UK-adopted IFRS.
Average working capital for each
segment and the Group is calculated by averaging the working
capital for each period of the financial year based on the
reporting calendar of each business.
|
Consistent with the definition
given
|
(Average) working
capital
as a percentage of
revenue
|
No direct equivalent
|
This measure expresses (average)
working capital as a percentage of revenue.
|
Consistent with the
definition given
|
Note A
|
Grocery
£m
|
Ingredients
£m
|
Agriculture
£m
|
Sugar
£m
|
Retail
£m
|
Central
and business to be closed
£m
|
Total
£m
|
|
24 weeks ended 2 March
2024
|
|
|
|
|
|
|
|
External revenue from continuing
businesses
|
2,124
|
1,056
|
850
|
1,170
|
4,500
|
34
|
9,734
|
Adjusted operating
profit
|
230
|
117
|
14
|
125
|
508
|
(43)
|
951
|
Adjusted operating margin
%
|
10.8%
|
11.1%
|
1.7%
|
10.7%
|
11.3%
|
|
9.8%
|
24 weeks ended 4 March
2023
|
|
|
|
|
|
|
|
External revenue from continuing
businesses
|
2,105
|
1,088
|
950
|
1,168
|
4,228
|
21
|
9,560
|
Adjusted operating
profit
|
173
|
102
|
12
|
97
|
351
|
(51)
|
684
|
Adjusted operating margin
%
|
8.2%
|
9.4%
|
1.3%
|
8.3%
|
8.3%
|
|
7.2%
|
Note B
|
Grocery
£m
|
Ingredients
£m
|
Agriculture
£m
|
Sugar
£m
|
Retail
£m
|
Central
and business to be closed
£m
|
Total
£m
|
|
24 weeks ended 2 March
2024
|
|
|
|
|
|
|
|
External revenue from continuing
businesses at actual rates
|
2,124
|
1,056
|
850
|
1,170
|
4,500
|
34
|
9,734
|
24 weeks ended 4 March
2023
|
|
|
|
|
|
|
|
External revenue from continuing
businesses at actual rates
|
2,105
|
1,088
|
950
|
1,168
|
4,228
|
21
|
9,560
|
Impact of foreign
exchange
|
(76)
|
(40)
|
(15)
|
(98)
|
(42)
|
(1)
|
(272)
|
External revenue from continuing
businesses at constant currency
|
2,029
|
1,048
|
935
|
1,070
|
4,186
|
20
|
9,288
|
% change at constant
currency
|
+5
%
|
+1
%
|
-9
%
|
+9
%
|
+7.5 %
|
|
+5
%
|
|
Grocery
£m
|
Ingredients
£m
|
Agriculture
£m
|
Sugar
£m
|
Retail
£m
|
Central
and business to be closed
£m
|
Total
£m
|
|
24 weeks ended 2 March
2024
|
|
|
|
|
|
|
|
Adjusted operating profit at
actual rates
|
230
|
117
|
14
|
125
|
508
|
(43)
|
951
|
24 weeks ended 4 March
2023
|
|
|
|
|
|
|
|
Adjusted operating profit at
actual rates
|
173
|
102
|
12
|
97
|
351
|
(51)
|
684
|
Impact of foreign
exchange
|
(7)
|
(4)
|
(1)
|
(25)
|
(2)
|
5
|
(34)
|
Adjusted operating profit at
constant currency
|
166
|
98
|
11
|
72
|
349
|
(46)
|
650
|
% change at constant
currency
|
+39 %
|
+19 %
|
+27 %
|
+74 %
|
+46 %
|
|
+46 %
|
Note C
|
24 weeks
ended
2
March
2024
|
24 weeks
ended
4
March
2023
|
52 weeks
ended 16 September 2023
|
Adjusted earnings per share (in
pence)
|
90.4
|
62.0
|
141.8
|
Dividend relating to the period
(in pence) - excluding special dividend proposed
|
20.7
|
14.2
|
47.3
|
Dividend cover
|
4
|
4
|
3
|
Note D
|
24 weeks
ended
2
March
2024
£m
|
24 weeks
ended
4
March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
From the cash flow
statement
|
Purchase of property, plant and
equipment
|
523
|
444
|
997
|
Purchase of intangibles
|
42
|
54
|
76
|
Capital expenditure
|
565
|
498
|
1,073
|
Note E
|
24 weeks
ended
2
March
2024
£m
|
24 weeks
ended
4
March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
From the cash flow
statement
|
Purchase of property, plant and
equipment
|
523
|
444
|
997
|
Purchase of intangibles
|
42
|
54
|
76
|
Purchase of subsidiaries, joint
ventures and associates
|
4
|
29
|
94
|
Purchase of other
investments
|
2
|
-
|
4
|
Gross investment
|
571
|
527
|
1,171
|
Note F
|
24 weeks
ended
2
March
2024
£m
|
24 weeks
ended
4
March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
|
Adjusted operating
profit
|
951
|
684
|
1,513
|
Charged to adjusted operating
profit:
|
|
|
|
Depreciation of property,
plant and equipment
|
264
|
258
|
531
|
Amortisation of operating
intangibles
|
23
|
20
|
44
|
Depreciation of
right-of-use assets and non-cash
lease
adjustments
|
139
|
128
|
273
|
Adjusted EBITDA
|
1,377
|
1,090
|
2,361
|
Net debt including lease
liabilities
|
(2,496)
|
(2,601)
|
(2,265)
|
Financial leverage
ratio
|
0.9
|
1.2
|
1.0
|
Note G
|
24 weeks
ended
2
March
2024
£m
|
24 weeks
ended
4
March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
|
Adjusted EBITDA (see note
F)
|
1,377
|
1,090
|
2,361
|
Repayment of lease liabilities net
of incentives received
|
(148)
|
(123)
|
(246)
|
Working capital
|
6
|
(703)
|
(216)
|
Capital expenditure (see note
D)
|
(565)
|
(498)
|
(1,073)
|
Purchase of subsidiaries, joint
ventures and associates
|
(4)
|
(29)
|
(94)
|
Sale of subsidiaries, joint
ventures and associates
|
-
|
4
|
4
|
Net interest paid
|
(29)
|
(35)
|
(74)
|
Income taxes paid
|
(145)
|
(148)
|
(341)
|
Share of adjusted profit after tax
from joint ventures and associates
|
(51)
|
(51)
|
(127)
|
Dividends received from joint
ventures and associates
|
43
|
43
|
107
|
Other
|
(16)
|
(60)
|
(32)
|
Free cash flow
|
468
|
(510)
|
269
|
Note H
|
24 weeks
ended
2
March
2024
£m
|
24 weeks
ended
4
March
2023
£m
|
52 weeks
ended 16 September 2023
£m
|
|
Cash at bank and in hand and cash
equivalents
|
1,268
|
1,213
|
1,457
|
Current loans and
overdrafts
|
(168)
|
(150)
|
(168)
|
Estimated inaccessible
cash
|
(63)
|
(61)
|
(73)
|
RCF
|
1,500
|
1,500
|
1,500
|
Total liquidity
|
2,537
|
2,502
|
2,716
|
Cautionary statements
This report contains
forward-looking statements. These have been made by the directors
in good faith based on the information available to them up to the
time of their approval of this report. The directors can give no
assurance that these expectations will prove to have been correct.
Due to the inherent uncertainties, including both economic and
business risk factors, underlying such forward-looking information,
actual results may differ materially from those expressed or
implied by these forward-looking statements. The directors
undertake no obligation to update any forward-looking statements
whether as a result of new information, future events or
otherwise.
Responsibility
statement
The Interim Results Announcement
complies with the Disclosure and Transparency Rules ('the DTR') of
the UK's Financial Conduct Authority in respect of the requirement
to produce a half-yearly financial report.
The directors confirm that to the
best of their knowledge:
|
this financial information has
been prepared in accordance with UK-adopted International
Accounting Standard 34 Interim Financial Reporting;
|
|
this Interim Results Announcement
includes a fair review of the important events during the first
half and their impact on the financial information, and a
description of the principal risks and uncertainties for the
remaining half of the year as required by DTR 4.2.7R;
and
|
|
this Interim Results Announcement
includes a fair review of material related party transactions and
changes therein since the last annual report as required by DTR
4.2.8R.
|
On behalf of the board
Michael McLintock
Chairman
|
George Weston
Chief Executive
|
Eoin Tonge
Finance Director
|
23 April 2024
|
|
|
Independent review report to
Associated British Foods plc
Conclusion
We have been engaged by the
Company to review the condensed set of financial statements in the
Interim Results Announcement for the 24 weeks ended 2 March 2024
which comprises the condensed consolidated income statement, the
condensed consolidated statement of comprehensive income, the
condensed consolidated balance sheet, the condensed consolidated
cash flow statement, the condensed consolidated statement of
changes in equity and the related explanatory notes. We have read
the other information contained in the Interim Results Announcement
and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
Based on our review, nothing has
come to our attention that causes us to believe that the condensed
consolidated interim financial statements in the Interim Results
Announcement for the 24 weeks ended 2 March 2024 are not prepared,
in all material respects, in accordance with UK-adopted
International Accounting Standard 34 Interim Financial Reporting and the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Basis for conclusion
We conducted our review in
accordance with the International Standard on Review Engagements
2410 (UK and Ireland) Review of
Interim Financial information ('ISRE') performed by the
Independent Auditor of the Entity issued by the Auditing Practices
Board. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 11, the
annual financial statements of the Group will be prepared in
accordance with UK-adopted International Accounting Standards. The
condensed set of financial statements included in this Interim
Results Announcement has been prepared in accordance with
UK-adopted International Accounting Standard 34 Interim Financial
Reporting.
Conclusions relating to Going
Concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis of Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or
that management have identified material uncertainties relating to
going concern that are not appropriately disclosed.
This conclusion is based on the
review procedures performed in accordance with this ISRE, however
future events or conditions may cause the entity to cease to
continue as a going concern.
Responsibilities of the
directors
The directors are responsible for
preparing the Interim Results Announcement in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
In preparing the Interim Results
Announcement, the directors are responsible for assessing the
Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the
review of the financial information
In reviewing the Interim Results
Announcement, we are responsible for expressing to the Company a
conclusion on the condensed set of financial statements in the
Interim Results Announcement. Our conclusion, including our
Conclusions Relating to Going Concern, is based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion paragraph of this report.
Use of our report
This report is made solely to the
company in accordance with guidance contained in International
Standard on Review Engagements 2410 (UK and Ireland) Review of Interim Financial information
performed by the Independent Auditor of the Entity issued by
the Auditing Practices Board. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than
the company, for our work, for this report, or for the conclusions
we have formed.
Ernst & Young LLP
Birmingham
23 April 2024