REG - Assoc.British Foods - Interim Results Announcement
Tue 07:00
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RNS Number : 5400G Associated British Foods PLC 29 April 2025
FOR RELEASE 29 April 2025
Interim Results Announcement
24 weeks ended 1 March 2025
FOR RELEASE 29 April 2025
Associated British Foods plc results for the 24 weeks ended 1 March 2025
Financial Headlines
24 weeks ended 24 weeks ended Actual currency Constant currency
1 March 2025 2 March 2024 change change
Group revenue £9,509m £9,734m -2% in line
Adjusted operating profit £835m £951m -12% -10%
Adjusted profit before tax £818m £911m -10%
Adjusted earnings per share 83.6p 90.4p -8%
Operating profit £710m £931m -24%
Profit before taxation £692m £881m -21%
Basic earnings per share 71.0p 87.4p -19%
fGross investment £557m £571m -2%
Free cash flow £27m £468m
Net cash before lease liabilities £201m £668m
Total net debt £2,772m £2,496m
Interim dividend 20.7p 20.7p in line
Operating profit is stated after exceptional charges and other items as shown
on the face of the condensed consolidated income statement. In H1 2025, total
exceptional items were £104m primarily related to a non-cash impairment
charge (H1 2024: £6m). 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 13. These measures are used within the Financial
Headlines and in this Interim Results Announcement.
George Weston, Chief Executive of Associated British Foods, said:
"These results reflect a robust performance in four of our five divisions. I
am frustrated with the results in our Sugar business, but we are clear on what
needs to be done by way of operational and regulatory solutions to improve
financial performance. Primark delivered good growth in Europe and the US,
with continued consumer caution in the UK. Primark's profit and margin
delivery was strong and our low-cost operating model is working well. Our
focus remains on sharp execution of our key growth initiatives across product,
brand, digital and new market entry. Our Grocery and Ingredients businesses
performed well and the outlook remains positive.
Looking ahead, in an operating environment with significant uncertainties, the
Group remains well positioned and our strong balance sheet enables continued
investment to deliver long-term sustainable growth."
Group performance
· Revenue in line with prior year, with growth in Retail and Ingredients offset
by a decline in Sugar
· Adjusted operating profit declined 10% due to an adjusted operating loss in
Sugar
· Adjusted EPS decreased 8% to 83.6p benefitting from the accretive impact of
share buybacks
· Continued investment of £557m in capacity, capabilities and new technology
· Free cash flow of £27m reflects lower operating profit and normal seasonal
working capital outflow
· Continued strong balance sheet with leverage ratio of 1.0x at 1 March 2025
Segmental performance
· Retail:
· Sales grew 1% to £4.5bn
· Adjusted operating profit increased 8% to £540m and adjusted operating margin
increased to 12.1%
· Growth in Europe and the US, while the retail environment in the UK and
Ireland was challenging
· In Grocery, good sales growth across most of our brands offset by lower sales
in US oils and Allied Bakeries, as expected
· Ingredients sales grew 2% and adjusted operating profit increased 8%
· Sugar had an adjusted operating loss of £16m, primarily due to lower European
sugar prices and an operating loss in Vivergo
· Agriculture adjusted operating profit decreased 8% to £12m
Shareholder returns
· Interim dividend in line with the prior year at 20.7p per share
· Completed £422m of share buybacks in 2025 to-date, with a further £169m to
be completed this financial year(1)
( )
(1) As at 25 April 2025
Full year outlook
Our outlook for the Group in this financial year is unchanged, with the
exception of Sugar where we are providing updated guidance below. The Group
outlook reflects the absorption of a US tariff impact in H2 2025, based on
what we know today.
In Primark, we continue to target low-single digit sales growth for the full
year. This will be driven by our store rollout programme in our growth markets
in Europe and the US, which is on track to contribute around 4% to total
Primark sales growth, offset by weaker sales in the UK and Ireland. While we
continue to assume our trading in the UK remains challenging in H2 2025, there
have been some early signs of improvement in recent weeks. We are focused on
driving underlying growth across our markets as we continue to strengthen
Primark's great-value proposition through initiatives in product, digital and
brand. We continue to expect adjusted operating profit margin in 2025 to be
broadly in line with last year's level. This reflects an improvement in gross
margin and good cost management, offsetting wage inflation and a step up in
investment. Our adjusted operating margin in H2 2025 is expected to be lower
than it was in H1 2025, given the impact from phasing of one-off items which
benefitted H1 2025. We continue to make good progress with our store rollout
programme and target a contribution of around 4% to 5% to Primark's total
annual sales growth for the foreseeable future.
In Grocery, we remain focused on driving sales of our leading international
and regionally-focused brands, underpinned by effective marketing investment
and strong commercial execution. We continue to expect overall performance
this year to reflect the normalisation of profitability in our US-focused
businesses and an operating loss in Allied Bakeries. Allied Bakeries continues
to face a very challenging market. We are evaluating strategic options for
Allied Bakeries against this backdrop and we expect to provide an update in H2
2025. In Ingredients, we expect growth to continue in both our yeast and
bakery ingredients businesses as well as in our portfolio of speciality
ingredients businesses.
In Sugar, persistent low European sugar prices and an operating loss in our UK
bioethanol business, Vivergo, are impacting overall profitability in 2025.
Challenges in Tanzania, due to the overhang of high levels of sugar imports in
2024, and in South Africa, due to drought, are also impacting performance. As
a result, we now expect Sugar to have an adjusted operating loss of up to
£40m in this financial year. In our Spanish business, Azucarera, the
deterioration in market conditions has demonstrated that the cost base is
structurally too high. As a result, we are close to completing an operational
review, which is assessing a number of scenarios to restructure this business.
In Vivergo, the way in which regulations are being applied to bioethanol is
undermining the commercial viability of our business. We are having
constructive discussions with the UK Government to explore regulatory options
to improve the position. There is no guarantee that these discussions will be
successful, and we will either mothball or close the Vivergo plant if
necessary. The actions we are taking in Azucarera and Vivergo increase our
confidence that Sugar profitability can recover over the medium term. The
timeframe for recovery in the Sugar segment is longer than we had originally
expected due a slower-paced rebalancing of supply and demand in European sugar
markets and a delay in the recovery of profitability in Tanzania.
In an operating environment with significant uncertainties, the Group still
remains well positioned for the medium term, supported by a strong balance
sheet and cash generation and good momentum in our Retail, Grocery and
Ingredients businesses.
For further information please contact:
Associated British Foods:
+44 20 7399 6545
Joana Edwards, Interim Finance Director Lucinda Baker, Head of Investor
Relations Chris Barrie, Corporate Affairs Director
Citigate Dewe Rogerson:
+44 20 7638 9571
Kevin Smith Tel: +44 7710 815924
Lucy Gibbs Tel: +44 7957 596729
There will be an analyst and investor presentation at 09.00am BST today which
will be streamed online and can be accessed via our website here
(https://www.abf.co.uk/investorrelations/results_and_presentations) .
Notes to editors
Associated British Foods is a diversified international food, ingredients and
retail group with annual sales of £20bn and 138,000 employees in 56
countries. It has significant businesses in Europe, Africa, the Americas, Asia
and Australia.
Our purpose is to provide safe, nutritious and affordable food, and clothing
that is great value for money. We take a long-term, patient approach to drive
sustainable growth and cash generation across our portfolio of food and retail
businesses to create value for all stakeholders. This aligns with our approach
to sustainability and sustainable supply chains, where we focus on what
matters and where we can make a difference.
Operating review
Retail
24 weeks ended 24 weeks ended Actual currency Constant currency
1 March 2025 2 March 2024
Revenue £m 4,472 4,500 -1% +1%
Adjusted operating profit £m 540 508 +6% +8%
Adjusted operating profit margin 12.1% 11.3%
Operating profit £m 537 508 +6%
Financial highlights
Primark's sales grew 1%. Our key growth markets, the US, Spain, Portugal,
France, Italy, and Central and Eastern Europe, delivered good growth,
underpinned by our strong customer value proposition and the successful
execution of our store rollout programme. In the UK and Ireland, sales
declined, despite good like-for-like sales growth over the key Christmas
trading period. Across our markets, store rollouts contributed 4% to total
sales growth in H1 2025 and total like-for-like sales declined 2.5%. As
expected, in our fastest-growing markets such as the US, Italy and France,
like-for-like metrics were impacted by the high number of recent store
openings.
Adjusted operating profit grew 8% and adjusted operating margin increased to
12.1%, demonstrating the strength of Primark's operating model. An improvement
in gross margin was primarily due to favourable foreign exchange, supplier
efficiencies and the effective management of markdowns. Focused cost
management and the phasing of one-off items more than offset wage inflation
and increased investment in product, digital and brand initiatives. This
investment will continue over the medium term, alongside a continued focus on
driving cost optimisation and efficiencies in our supply chain, store
operating model and central costs.
Market highlights
Percentage of H1 2025 Sales Growth
Market Primark sales
Spain & Portugal 18% +8%
France & Italy 16% +4%
Central & Eastern Europe 3% +21%
US 5% +17%
UK & Ireland 46% -4%
Northern Europe 12% +1%
In Spain and Portugal, sales grew strongly, up 8%. This reflects good
underlying growth in both markets and a strong contribution from recently
opened stores. In Spain, sales were impacted by flooding in the Valencia
region, which led to store disruption.
In France and Italy, sales grew 4% driven by recent store openings. In Central
and Eastern Europe, sales growth of 21% reflected a strong contribution from
new stores. In the US, sales grew 17% and recent store openings are positively
contributing to overall sales density in the US. During H1 2025, we opened two
new stores, including our first in Texas, to reach 29 stores in total with an
additional 18 leases signed. Initiatives to drive increased brand awareness in
the US, included a 12-week trial marketing campaign in the New York metro area
during the period.
In both the UK and Ireland, sales decreased 4%. The UK clothing retail market
declined in the period, reflecting cautious consumer sentiment and a lack of
seasonal purchasing catalyst in the autumn months due to mild weather.
Shopping activity within elements of Primark's customer base was particularly
weak and as a result Primark's market share reduced from 6.9% to 6.7%(2). Our
online participation through Click & Collect is building momentum as we
increase customer awareness and make more of our product ranges available to
more customers, particularly those who shop in smaller stores. The service is
now available in 158 stores(3) and will be in all 187 of our British stores by
the end of June 2025. We also had a sales uplift from active management of our
UK store estate, including store relocations, extensions, new store openings
and an ongoing store refurbishment programme. Excluding the benefit from
changes to the store estate, like-for-like sales in the UK and Ireland
declined 6.0%.
In our Northern European markets, Germany, the Netherlands, Belgium and
Austria, sales grew 1% and like-for-like sales grew 2.4%. Strong growth in
Germany and the Netherlands reflects the restructuring of our store footprint,
which has driven much- improved sales densities and profitability. Growth in
Germany also reflects the prior year impact of industry-wide strike action.
Strategic and operational highlights
Looking ahead, we have a clear roadmap for new store rollouts in our growth
markets and we are targeting that these will contribute around 4% to 5% to
Primark's total annual sales growth for the foreseeable future. In addition,
we are making good progress with our franchise agreement with the Alshaya
Group to enter the Gulf Cooperation Council ('GCC') markets and expect to
announce the opening of new stores in the region soon.
We continued to make progress with the execution of our digital strategy. This
is through investment in our website, search engine optimisation ('SEO') and
paid marketing, as well as optimising and scaling our CRM activity. We believe
all of these drove footfall into stores and contributed to overall sales
growth.
In H1 2025, we invested £212m in capital projects, including a number of new
stores in Europe and the US. We opened a total of eight new stores, extended
one store, right-sized two stores and relocated two stores, which increased
our retail selling space by 0.3m sq ft. On 1 March 2025, we were trading from
459 stores across 17 markets, with 19.1m sq ft of selling space. We also made
good progress with our store refurbishment programme, completing refits in
twelve stores comprising 0.4m sq ft of selling space, which included the
rollout of self-service checkouts to now be in 136 stores. We continued to
invest in our depot network, including automation projects, and we increased
investment in technologies to improve the operational performance of our
stores and depots and build the capability to deliver long-term growth.
In March 2025, Eoin Tonge was appointed interim Chief Executive of Primark,
following the resignation of Paul Marchant. Eoin has the support of an
experienced leadership team in Primark and the search for a permanent
successor is underway.
(2) Kantar, Primark market share of the total UK clothing, footwear and
accessories market including online by value, 24-week data to 2 March 2025
(3) As at 25 April 2025
Grocery
24 weeks ended 24 weeks ended Actual currency Constant currency
1 March 2025 2 March 2024
Revenue £m 2,089 2,124 -2% in line
Adjusted operating profit £m 227 230 -1% +1%
Adjusted operating profit margin 10.9% 10.8%
Operating profit £m 219 219 in line
Grocery sales were in line with the prior year. Adjusted operating profit
increased 1% to £227m and adjusted operating margin increased to 10.9%. Most
of our leading international brands and regionally-focused businesses
performed well, underpinned by strong investment in effective marketing and
excellent commercial execution. We also benefitted from the consolidation of
our recent acquisition of The Artisanal Group in Australia. As expected, lower
sales in US oils and Allied Bakeries impacted overall Grocery growth.
Our portfolio of international brand businesses(4) performed well. Twinings
had good sales growth in most markets, including the UK and France, as a
result of effective marketing investment and strong in-store visibility. We
had good volume growth in black tea, as well as continued growth in the
wellness category across our portfolio of green, herbal and fruit teas.
Overall sales of Ovaltine grew in H1 2025. In Europe and Thailand, price
increases, due to significantly higher cocoa costs, had a negative impact on
volumes. Most of our other markets had good growth, including China, Myanmar,
Brazil and Nigeria. Our new manufacturing facility in Nigeria is nearing
completion and will support continued growth in Africa.
Patak's, Blue Dragon, Jordans and our balsamic vinegar business all performed
well. We are adding capacity in Poland to support the international growth of
Blue Dragon.
Within our regionally-focused portfolio, our US-focused businesses(5), which
include market-leading brands such as Mazola and Fleischmann's, performed
broadly as expected. This included a normalisation in sales of consumer oils,
while maintaining continued strength in market share through our focus on
targeted marketing investment and strong in-store execution. Our joint venture
in Stratas, a leading supplier of oils and other products to the foodservice,
ingredients and retail markets, delivered strong growth in operating profit.
In H1 2025, Stratas completed the acquisition of AAK's foodservice facility in
New Jersey, US and its associated brands and business. This expands its
portfolio of premium dressings and sauces and further strengthens its position
in the northeast of the US.
Our UK-focused businesses(5) declined overall. As expected, this was primarily
due to lower volumes and sales in Allied Bakeries, which resulted in an
increased operating loss. Allied Bakeries continues to face a very challenging
market. We are evaluating strategic options for Allied Bakeries against this
backdrop and we expect to provide an update in H2 2025. Across the rest of our
UK portfolio, performance was mixed, including good growth in Westmill, a
supplier of global foods to the foodservice sector, and in our sports
nutrition businesses, while sales in Silverspoon were lower. During H1 2025,
we completed the installation of a manufacturing line to produce
Scrocchiarella bakery products in Bradford, UK, and accelerate growth in the
UK foodservice channel.
Within our Australia and New Zealand-focused businesses(5), sales in both our
Tip Top bread and Don meats businesses improved, although the consumer
environment remained challenging. We also benefitted from the consolidation of
our recent acquisition, The Artisanal Group. During H1 2025, we commissioned a
new buns and rolls line at our bakery in Queensland to support Tip Top's
growth in the foodservice channel and we progressed with the expansion of our
bakery in Western Australia, where Tip Top is the leading supplier.
(4) Our international brand businesses, which include Twinings, Ovaltine, Blue
Dragon, Patak's, Jordans and Mazzetti, accounted for approximately a third of
total Grocery sales.
(5) Within our regionally-focused brand businesses, US-focused businesses
accounted for approximately 15% of total Grocery sales, UK-focused businesses
accounted for approximately a quarter of total Grocery sales and Australia and
New Zealand-focused businesses accounted for approximately a quarter of total
Grocery sales.
Ingredients
24 weeks ended 24 weeks ended Actual currency Constant currency
1 March 2025 2 March 2024
Revenue £m 1,031 1,056 -2% +2%
Adjusted operating profit £m 120 117 +3% +8%
Adjusted operating profit margin 11.6% 11.1%
Operating profit £m 115 110 +5%
Ingredients sales grew 2%, primarily driven by our yeast and bakery
ingredients business, AB Mauri. Adjusted operating profit increased by 8% and
adjusted operating margin increased to 11.6% reflecting good management of
input costs.
Our yeast and bakery ingredients business had good sales growth led by our
European and Central and South American markets. We are benefitting from our
strong route to market and broad product portfolio. Growth also reflects the
consolidation of prior year acquisitions, in particular in our AB Biotek
business, which provides speciality yeast and technologies to industries
including alcoholic beverages, bioethanol and animal nutrition. We continued
to make progress with capital projects to drive long-term growth, including
the construction of our fresh yeast plant in Northern India.
In our specialty ingredients businesses, ABFI, most of the portfolio performed
well. Our enzymes and health and nutrition businesses had particularly strong
growth, while sales in our pharmaceutical businesses were lower due to softer
demand in certain product categories. We continued to invest in R&D,
commercial capabilities and strategic capital projects to drive long- term
growth. This included new capacity and technologies in our yeast extracts and
enzymes businesses.
Our ingredients business in Australia and New Zealand, Mauri ANZ, performed
well and benefitted from additional capacity in animal feed mixes from the new
mill we commissioned last year. In H1 2025, we began work to relocate our
flour mill in Victoria. New Food Coatings, our joint venture ('JV') in
Australia, New Zealand and south east Asia, specialising in seasonings, sauces
and ingredients, continued to grow. The JV is investing in a new facility in
Bangkok, Thailand, to add capacity.
Sugar
24 weeks ended 24 weeks ended Actual currency Constant currency
1 March 2025 2 March 2024
Revenue £m 1,098 1,170 -6% -4%
Adjusted operating (loss)/profit £m (16) 125 -113% -114%
Adjusted operating (loss)/profit margin (1.5%) 10.7%
Operating (loss)/profit £m (122) 121 -201%
Sugar sales declined 4% and the segment had an adjusted operating loss of
£16m. This was primarily due to lower European sugar prices and continued low
bioethanol prices. Given these market challenges, we are close to completing
an operational review of our Spanish sugar business and are in discussions
with the UK Government to improve the regulatory environment for our
bioethanol business, Vivergo.
In the UK and Spain(6), sales and profitability in our sugar businesses
declined significantly in H1 2025 as a result of persistent low European sugar
prices and a high cost of beet for the 2023/24 campaign. Profitability in the
UK was also impacted by a gas turbine breakdown during the period, which is
now resolved. The processing of our UK beet crop for the 2024/25 campaign is
now complete and sugar production was approximately 1.1m tonnes, which is
broadly in line with last year.
In our Spanish business, Azucarera, the deterioration in market conditions has
demonstrated that the cost base is structurally too high. As a result, we are
close to completing an operational review, which is assessing a number of
scenarios to restructure our business in Spain. In H1 2025, we recognised a
non-cash impairment charge of £101m.
Within our African businesses, Malawi and Eswatini had good growth. Sales
growth in Zambia was good but higher production costs due to drought meant
profitability was lower. In South Africa, drought resulted in lower sales and
profit. In Tanzania, our business is in a transitional year as it builds new
capacity, and the overhang from high levels of sugar imports in 2024
significantly impacted sales and profit in H1 2025. These imports were a
result of low domestic supply following adverse weather and the delayed build
of our new sugar mill. However, the mill is now nearing completion and is
expected to be commissioned in H2 2025. This will significantly increase our
production capacity and therefore the domestic sugar supply in the Tanzanian
market. In April 2025, we completed the sale of our moth-balled sugar
operations in Mozambique.
Our bioethanol plant in the UK, Vivergo, reduced its production levels in
response to continued low prices for bioethanol. This resulted in much-reduced
sales and an operating loss in H1 2025. The way in which regulations are being
applied to bioethanol is undermining the commercial viability of our business.
We are having constructive discussions with the UK Government to explore
regulatory options to improve the position. There is no guarantee that these
discussions will be successful, and we will either mothball or close the
Vivergo plant if necessary.
(6) Our European sugar businesses in the UK and Spain accounted for just over
50% of total Sugar sales, our African sugar business accounted for
approximately 40% of total Sugar sales and our UK bioethanol business,
Vivergo, accounted for approximately 5% of total Sugar sales.
Agriculture
24 weeks ended 24 weeks ended Actual currency Constant currency
1 March 2025 2 March 2024
Revenue £m 819 850 -4% -3%
Adjusted operating profit £m 12 14 -14% -8%
Adjusted operating profit margin 1.5% 1.7%
Operating profit £m 7 10 -30%
Agriculture sales declined 3% and adjusted operating profit decreased 8% to
£12m. This primarily reflects lower sales of compound feed and an impact from
one-off costs.
Most of our speciality feed and additives businesses performed well. In
particular, Premier Nutrition in the UK had strong growth and AB Vista, our
international feed additives business, had good growth in both enzyme and
non-enzyme additives. Our dairy business, which was formed from a number of
acquisitions in 2023 to provide a unique full-service offer to the dairy
sector, delivered good growth. Sales in our compound feed businesses were
lower due to reduced commodity prices and continued soft demand in the UK and
China.
The profit contribution from our joint venture, Frontier, declined. While the
performance of our seed and crop production business was much improved, our
grain trading business was impacted by less favourable market conditions and a
smaller UK harvest.
Financial review
Group performance
Group revenue in the period was £9.5bn, 2% below last year at actual rates.
Revenue was in line with the prior year at constant currency, with growth in
Retail and Ingredients revenue offset by a decline in Sugar and Agriculture
revenue. The Group generated an adjusted operating profit of £835m, a
decrease of 12% at actual rates. Adjusted operating profit declined 10% in
constant currency, reflecting an adjusted operating loss in Sugar. Operating
profit for the Group of £710m was 24% lower, after exceptional items of
£104m (H1 2024 - £6m).
There was a translation loss of £31m on 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 African businesses.
Segmental summary
Revenue Adjusted operating profit
24 weeks 24 weeks Change 52 weeks 24 weeks 24 weeks Change 52 weeks
ended 1 ended 2 % ended 14 September ended 1 ended 2 % ended 14 September
March 2025 March 2024 2024 March 2025 March 2024 2024
£m £m £m £m £m £m
At actual rates
Retail 4,472 4,500 -0.6 9,448 540 508 +6.3 1,108
Grocery 2,089 2,124 -1.6 4,242 227 230 -1.3 511
Ingredients 1,031 1,056 -2.4 2,134 120 117 +2.6 233
Sugar 1,098 1,170 -6.2 2,529 (16) 125 -112.8 199
Agriculture 819 850 -3.6 1,650 12 14 -14.3 41
Central - - - - (46) (45) -2.2 (100)
Business disposed 9,509 9,700 -2.0 20,003 837 949 -11.8 1,992
Sugar
- 34 70 (2) 2 6
9,509 9,734 -2.3 20,073 835 951 -12.2 1,998
The segmental analysis by division has been set out in the operating reviews.
Business disposed relates to the sale of our China North Sugar business at the
end of the previous financial year and we have incurred some immaterial
closure costs in H1 2025 as part of this disposal.
The segmental analysis by geography is set out in note 1 of the condensed
financial statements. Of note is the decrease in adjusted operating profit in
Europe and the UK as a result of the significant reduction in profitability in
Sugar.
Adjusted earnings per share
24 weeks ended 24 weeks ended Change 52 weeks ended
1 March 2025 2 March 2024 % 14 September
£m £m 2024
£m
Adjusted operating profit 835 951 -12.2 1,998
Finance income 27 35 71
Finance expense (16) (17) (33)
Lease interest expense (48) (45) (102)
Other financial income/(expense) 20 (13) 23
Adjusted profit before taxation 818 911 -10.2 1,957
Taxation on adjusted profit (197) (211) (453)
Adjusted profit after tax 621 700 -11.3 1,504
Adjusted earnings attributable to equity shareholders 612 685 -10.7 1,479
Adjusted earnings per share (in pence) 83.6 p 90.4 p -7.5 196.9 p
Interest and other financial income
Finance income decreased as a result of lower cash balances and lower rates of
interest earned, as most market interest rates have fallen. We expect a lower
level of finance income in H2 2025 given continued lower average cash balances
following shareholder returns, as well as lower interest rates.
Other financial income improved, compared to material non-recurring losses on
foreign exchange balances in Malawi and Nigeria in H1 2024.
On an adjusted basis, profit before tax was down 10.2%, to £818m.
Taxation on adjusted profit
In H1 2025, the adjusted tax charge reduced to £197m, driven by the reduction
in adjusted profit before tax, partially offset by an increase in the adjusted
effective tax rate from 23.2% in H1 2024 to 24.1% in H1 2025. The adjusted
effective tax rate includes the impact from the introduction of Pillar 2, and
changes to the mix in profits by jurisdiction.
Adjusted earnings per share decreased by 7.5% to 83.6p per share. This was
driven by the decrease in adjusted earnings, partially offset by the increase
in other financial income. Adjusted earnings per share continues to benefit
from the reduction in the weighted average number of shares, from 758 million
in H1 2024 to 732 million in H1 2025, as a result of ongoing share buybacks.
The weighted average number of shares will continue to reduce as we complete
the current share buyback. At the end of H1 2025, £232m remained to be
completed in H2 2025.
Basic earnings per share
24 weeks ended 24 weeks ended Change 52 weeks ended
1 March 2025 2 March 2024 % 14 September
£m £m 2024
£m
Adjusted profit before taxation 818 911 -10.2 1,957
Acquired inventory fair value adjustments - (1) (2)
Amortisation of non-operating intangibles (19) (20) (40)
Exceptional items (104) (6) (35)
Profit less losses on sale and closure of businesses (1) (10) 26
Profits less losses on disposal of non-current assets (2) 8 16
Transaction costs - (1) (5)
Profit before tax 692 881 -21.5 1,917
Taxation (163) (203) (437)
Profit after tax 529 678 -22.0 1,480
Earnings attributable to equity shareholders 520 663 -21.6 1,455
Basic earnings per share (in pence) 71.0 p 87.4 p -18.8 193.7 p
Profit before tax of £692m decreased by 21.5%.
This included a non-cash exceptional impairment charge of £104m in the Sugar
segment. This comprised a full impairment charge of £101m on property, plant
and equipment in Azucarera, our Spanish business, as a result of a significant
worsening in trading performance. A further £3m impairment charge was taken
in our Vivergo business, which continues to be impacted by low bioethanol
prices. In H1 2024, the non-cash exceptional impairment charges included in
the Sugar segment mostly related to Vivergo.
In H1 2025, no material or significant costs have been incurred on the sale
and closure of businesses. In H1 2024, 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 was £163m (H1 2024 - £203m). The reduction reflects the
lower adjusted tax charge and the impact of the deferred tax credit arising on
the impairment of property, plant and equipment in Azucarera.
Earnings attributable to equity shareholders were £520m and basic earnings
per share decreased by 18.8% to 71.0p.
Cash flow
24 weeks ended 24 weeks ended 52 weeks ended
1 March 2025 2 March 2024 14 September 2024
£m £m £m
Adjusted EBITDA 1,290 1,377 2,910
Repayment of lease liabilities net of incentives received (158) (148) (308)
Working capital (318) 6 305
Capital expenditure (553) (565) (1,184)
Purchase of subsidiaries, joint ventures and associates (1) (4) (93)
Sale of subsidiaries, joint ventures and associates (1) - 24
Net interest paid (39) (29) (69)
Taxation (147) (145) (340)
Share of adjusted profit after tax from joint ventures and associates (53) (51) (120)
Dividends received from joint ventures and associates 54 43 105
Other (47) (16) 125
Free cash flow 27 468 1,355
Share buyback (363) (281) (562)
Dividends (508) (348) (502)
Movement in loans and current asset investments 228 52 (318)
Cash flow (616) (109) (27)
In H1 2025, the free cash inflow was £27m as a result of lower operating
profit and a higher working capital movement. The increase in working capital
reflects the seasonality of our businesses, which last year was offset by the
cash inflow from the normalisation of Primark's inventory.
Capital expenditure was broadly in line with H1 2024 and comprised a number of
large capital projects in Primark and the food businesses.
There were no material acquisitions or disposals in H1 2025.
The level of cash tax was broadly in line with H1 2024. For the current
financial year, we expect cash tax levels to be moderately lower than in 2024,
which includes the benefit of an anticipated state aid refund.
In other cash flow, we continued to have a benefit from the UK pension fund
abatement of £31m and an increase in own share purchases of £23m in H1 2025,
as well as a £16m increase in provisions, mostly in Sugar.
The cash outflow for share buybacks in H1 2025 was £363m, and comprised £91m
spent on the £100m extended second share buyback announced at the end of the
last year, as well as £268m spent on our third £500m share buyback. We also
paid £508m for total dividends in H1 2025, which comprised the final dividend
of £310m and the special dividend of £198m in respect of the prior financial
year.
The decrease in current asset investments was due to a lower proportion of
cash deposits placed with a greater than 90-day term.
Financing and liquidity
At 1 March At 2 March At 14 September
2025 2024 2024
£m £m £m
Short-term loans and overdrafts (169) (168) (159)
Long-term loans (454) (432) (454)
Lease liabilities (2,973) (3,164) (3,065)
Total debt (3,596) (3,764) (3,678)
Cash at bank and in hand and cash equivalents 758 1,268 1,323
Current asset investments 66 - 334
Total net debt (2,772) (2,496) (2,021)
Leverage ratio 1.0x 0.9x 0.7x
At 1 March 2025, the Group held cash, cash equivalents and current asset
investments of £824m. In addition, the Group has an undrawn Revolving Credit
Facility ('RCF') for £1.5bn, which is free from performance covenants and
matures in June 2029.
Total liquidity at 1 March 2025 was £2.1bn, comprised £0.8bn of cash, cash
equivalents and current asset investments, less non-qualifying borrowings and
inaccessible cash of £0.2bn, plus the £1.5bn RCF. This compares to £2.9bn
at the end of the prior financial year and £2.5bn at the end of H1 2024.
Total net debt increased by £751m in H1 2025 to £2,772m, as a result of
£565m lower cash at bank and in hand and cash equivalents and £268m lower
current asset investments. A combination of lower adjusted EBITDA, seasonal
working capital movements and higher total net debt resulted in a higher
leverage ratio of 1.0x at 1 March 2025, compared to 0.7x at the prior
financial year end.
Pensions
Employee benefits assets primarily comprise the accounting surplus of the
Group's UK defined benefit scheme. On 1 March 2025, the surplus in the UK was
£1,506m (H1 2024 - £1,476m; 2024 full year - £1,454m). The increase from
the prior financial year end reflects a decrease in the pension liabilities
due to an increase in corporate bond yields, partially offset by negative
asset returns and a slight increase in the long term expected inflation
assumption.
Dividends and share buyback
As previously announced, we expect to complete £591m of share buybacks in
this financial year. In H1 2025, we completed £359m of buybacks with a
remaining amount of £232m expected to be completed in H2 2025.
The Board has declared an interim dividend of 20.7p per share. The dividend
will be paid on 4 July 2025 to shareholders registered at the close of
business on 30 May 2025.
Our principal risks and uncertainties
The delivery of our strategic objectives is dependent on effective risk
management. There are a number of potential risks and uncertainties which
could have a material impact on the Group's performance and could cause actual
results to differ materially from expected and historical results. Details of
the principal risks facing the Group's businesses at an operational level were
included on pages 78 to 86 of the Group's Annual Report and Accounts for the
52 weeks ended 14 September 2024, 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 geopolitical landscape continues to be fragile, which could have an impact
on the cost of raw materials and key commodities. The ongoing Russian war in
Ukraine continues to drive economic uncertainty in almost all of the markets
in which we operate. The impact of recent changes in US international policy
remains uncertain. Our procurement teams continue to work closely with
suppliers to maintain the effective operation of our supply chains.
Consumer sentiment remains cautious and trading activity within elements of
our shopper base has been weak. Sentiment is unlikely to improve as markets
continue to face uncertainty and instability following recent tariff
announcements by the US, retaliatory actions by China and the risk of further
tariff trade wars. Consumer confidence could deteriorate further as a number
of countries, including the US, face the risk of recession that could increase
individuals' debt problems. The impact on our businesses will depend on the
extent of government intervention, the extent of increased taxation on
individuals and businesses and the duration of any economic downturns.
Our businesses remain on high alert to the heightened risk of IT security
breaches and cyber-based attacks. We continue to invest in monitoring and
detection capabilities.
On average, sterling has slightly strengthened against most of our trading
currencies in the first half of the year, resulting in a £31m negative
translation impact on operating profit. The Group purchases a wide range of
commodities in the ordinary course of business. Agriculture commodity prices
varied across the Group with some indices continuing to see volatility, and
there has been downwards pressure on global sugar prices impacting our
European sugar businesses revenue. Businesses continue to manage commodity
price risk under their existing risk management frameworks and, where
appropriate, reflect this in pricing of products.
Going concern
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 2026 financial year. For this reason, they continue to adopt the going
concern basis in preparing the Condensed Consolidated Interim Financial
Statements. See note 10 to the Condensed Consolidated Interim Financial
Statements.
Condensed consolidated income statement
for the 24 weeks ended 1 March 2025
24 weeks ended 24 weeks ended 52 weeks ended
1 March 2025 2 March 2024 14 September 2024
£m £m £m
Continuing operations Note
Revenue 1 9,509 9,734 20,073
Operating costs before exceptional items (8,744) (8,854) (18,239)
Exceptional items 2 (104) (6) (35)
661 874 1,799
Share of profit after tax from joint ventures and associates 51 49 117
Profits less losses on disposal of non-current assets (2) 8 16
Operating profit 710 931 1,932
Adjusted operating profit 835 951 1,998
Profits less losses on disposal of non-current assets (2) 8 16
Amortisation of non-operating intangibles (19) (20) (40)
Acquired inventory fair value adjustments - (1) (2)
Transaction costs - (1) (5)
Exceptional items 2 (104) (6) (35)
(10) 26
Profits less losses on sale and closure of businesses 6 (1)
Profit before interest 709 921 1,958
Finance income 27 35 71
Finance expense (64) (62) (135)
Other financial income/(expense) 20 (13) 23
Profit before taxation 692 881 1,917
Adjusted profit before taxation 818 911 1,957
Profits less losses on disposal of non-current assets (2) 8 16
Amortisation of non-operating intangibles (19) (20) (40)
Acquired inventory fair value adjustments - (1) (2)
Transaction costs - (1) (5)
Exceptional items 2 (104) (6) (35)
Profits less losses on sale and closure of businesses 6 (1) (10) 26
Taxation - UK (excluding tax on exceptional items) (30) (59) (108)
- UK (on exceptional items) 1 4 5
- Overseas (excluding tax on exceptional items) (159) (148) (335)
- Overseas (on exceptional items) 25 - 1
3 (163) (203) (437)
Profit for the period 529 678 1,480
Attributable to
Equity shareholders 520 663 1,455
Non-controlling interests 9 15 25
Profit for the period 529 678 1,480
Basic and diluted earnings per ordinary share (pence) 4 71.0 87.4 193.7
Dividends per share paid and proposed for the period (pence) 5 20.7 20.7 63.0
Special dividend per share proposed for the period (pence) - - 27.0
Condensed consolidated statement of comprehensive income
for the 24 weeks ended 1 March 2025
24 weeks ended 24 weeks ended 52 weeks ended
1 March 2025 2 March 2024 14 September 2024
£m £m £m
Profit for the period recognised in the income statement 529 678 1,480
Other comprehensive income
Remeasurements of defined benefit schemes 63 65 38
Deferred tax associated with defined benefit schemes (15) (17) (10)
Items that will not be reclassified to profit or loss 48 48 28
Effect of movements in foreign exchange (27) (151) (349)
Net gain on hedge of net investment in foreign subsidiaries 2 2 -
Net loss on other investments held at fair value through other
comprehensive income - - (5)
Deferred tax on foreign exchange movements (1) - -
Current tax on foreign exchange movements - - (2)
Movement in cash flow hedging position 152 (11) (51)
Deferred tax on cash flow hedging position movements (32) 4 13
Deferred tax on other investment reserve movements - - 1
Share of other comprehensive loss of joint ventures and associates 3 (3) (10)
Effect of hyperinflationary economies 41 41 59
Deferred tax associated with hyperinflationary economies (10) - -
Items that are or may be subsequently reclassified to profit or loss 128 (118) (344)
Other comprehensive income/(loss) for the period 176 (70) (316)
Total comprehensive income for the period 705 608 1,164
Attributable to
Equity shareholders 688 609 1,159
Non-controlling interests 17 (1) 5
Total comprehensive income for the period 705 608 1,164
Condensed consolidated balance sheet
at 1 March 2025
1 March 2025 2 March 2024 14 September 2024
Note £m £m £m
Non-current assets
Intangible assets 1,924 1,885 1,896
Property, plant and equipment 6,265 5,848 6,098
Investment properties 105 110 105
Right-of-use assets 2,192 2,351 2,255
Investments in joint ventures 275 297 286
Investments in associates 106 99 95
Employee benefits assets 1,572 1,523 1,506
Income tax - 23 -
Deferred tax assets 237 186 223
Other receivables 31 70 30
Total non-current assets 12,707 12,392 12,494
Current assets
Inventories 3,180 3,120 2,942
Biological assets 141 128 94
Trade and other receivables 1,611 1,677 1,697
Derivative assets 141 87 28
Current asset investments 7 66 - 334
Income tax 79 69 102
Cash and cash equivalents 7 758 1,268 1,323
Total current assets 5,976 6,349 6,520
Total assets 18,683 18,741 19,014
Current liabilities
Lease liabilities 7 (456) (345) (267)
Loans and overdrafts 7 (169) (168) (159)
Trade and other payables (2,875) (2,799) (2,934)
Derivative liabilities (35) (71) (97)
Income tax (127) (95) (133)
Provisions (52) (61) (78)
Total current liabilities (3,714) (3,539) (3,668)
Non-current liabilities
Lease liabilities 7 (2,517) (2,819) (2,798)
Loans 7 (454) (432) (454)
Provisions (65) (55) (60)
Income tax (7) - -
Deferred tax liabilities (753) (660) (682)
Employee benefits liabilities (75) (71) (74)
Total non-current liabilities (3,871) (4,037) (4,068)
Total liabilities (7,585) (7,576) (7,736)
Net assets 11,098 11,165 11,278
Equity
Issued capital 41 43 42
Other reserves 178 180 177
Translation reserve (414) (178) (383)
Hedging reserve 78 (10) (45)
Retained earnings 11,112 11,043 11,395
Total equity attributable to equity shareholders 10,995 11,078 11,186
Non-controlling interests 103 87 92
Total equity 11,098 11,165 11,278
Condensed consolidated cash flow statement
for the 24 weeks ended 1 March 2025
24 weeks ended 24 weeks ended 52 weeks ended
1 March 2025 2 March 2024 14 September 2024
Note £m £m £m
Cash flow from operating activities
Profit before taxation 692 881 1,917
Profits less losses on disposal of non-current assets 2 (8) (16)
Profits less losses on sale and closure of businesses 1 10 (26)
Transaction costs - 1 5
Finance income (27) (35) (71)
Finance expense 64 62 135
Other financial (income)/expense (20) 13 (23)
Share of profit after tax from joint ventures and associates (51) (49) (117)
Amortisation 42 41 100
Depreciation (including of right-of-use assets) 430 403 849
Exceptional items 104 6 35
Acquired inventory fair value adjustments - 1 2
Effect of hyperinflationary economies 7 5 21
Net change in the fair value of current biological assets (52) (56) (22)
Share-based payment expense 13 13 31
Pension costs less contributions 29 25 58
(Increase)/decrease in inventories (248) 47 169
Decrease in receivables 77 57 23
(Decrease)/increase in payables (147) (98) 113
Purchases less sales of current biological assets 5 5 1
(Decrease)/increase in provisions (19) (3) 30
Cash generated from operations 902 1,321 3,214
Income taxes paid (147) (145) (340)
Net cash generated from operating activities 755 1,176 2,874
Cash flow from investing activities
Dividends received from joint ventures and associates 54 43 105
Purchase of property, plant and equipment (490) (523) (1,124)
Purchase of intangibles (63) (42) (60)
Lease incentives received 11 12 40
Sale of property, plant and equipment 5 12 43
Decrease/(increase) in current asset investments 7 268 - (334)
Purchase of subsidiaries, joint ventures and associates (1) (4) (93)
Sale of subsidiaries, joint ventures and associates (1) - 24
Purchase of other investments (3) (2) (4)
Interest received 27 26 71
Net cash used in investing activities (193) (478) (1,332)
Cash flow from financing activities
Dividends paid to non-controlling interests (6) (12) (13)
Dividends paid to equity shareholders 5 (508) (348) (502)
Interest paid (66) (55) (140)
Repayment of lease liabilities 7 (169) (160) (348)
(Decrease)/increase in short-term loans 7 (35) 11 (50)
(Decrease)/increase in long-term loans 7 (5) 41 66
Share buyback (363) (281) (562)
Movement from changes in own shares held (26) (3) (20)
Net cash used in financing activities (1,178) (807) (1,569)
Net decrease in cash and cash equivalents (616) (109) (27)
Cash and cash equivalents at the beginning of the period 1,235 1,388 1,388
Effect of movements in foreign exchange 7 (70) (126)
Cash and cash equivalents at the end of the period 7 626 1,209 1,235
Condensed consolidated statement of changes in equity
for the 24 weeks ended 1 March 2025
Note Issued capital Other reserves Translation Hedging reserve Retained earnings Total Non- controlling interests Total equity
£m £m reserve £m £m £m £m £m
£m
Balance as at 14 September 2024 42 177 (383) (45) 11,395 11,186 92 11,278
Total comprehensive income
Profit for period recognised in income statement - - - - 520 520 9 529
Remeasurements of defined benefit schemes - - - - 63 63 - 63
Deferred tax associated with defined benefit schemes - - - - (15) (15) - (15)
Items that will not be reclassified to profit or loss - - - - 48 48 - 48
Effect of movements in foreign exchange - - (35) - - (35) 8 (27)
Net gain on hedge of net investment in foreign subsidiaries - - 2 - - 2 - 2
Deferred tax on foreign exchange movements - - (1) - - (1) - (1)
Movement in cash flow hedging position - - - 152 - 152 - 152
Deferred tax on cash flow hedging position movements - - - (32) - (32) - (32)
Share of other comprehensive income of joint ventures and associates - - 3 - - 3 - 3
Effect of hyperinflationary economies - - - - 41 41 - 41
Deferred tax associated with hyperinflationary economies - - - - (10) (10) - (10)
Items that are or may be subsequently reclassified to profit or loss - - (31) 120 31 120 8 128
Other comprehensive income - - (31) 120 79 168 8 176
Total comprehensive income - - (31) 120 599 688 17 705
Inventory cash flow hedge movements
Amounts transferred to cost of inventory - - - 3 - 3 - 3
Total inventory cash flow hedge movements - - - 3 - 3 - 3
Transactions with owners
Dividends paid to equity shareholders 5 - - - - (508) (508) - (508)
Net movement in own shares held - - - - (13) (13) - (13)
Share buyback (1) 1 - - (361) (361) - (361)
Dividends paid to non-controlling interests - - - - - - (6) (6)
Total transactions with owners (1) 1 - - (882) (882) (6) (888)
Balance as at 1 March 2025 41 178 (414) 78 11,112 10,995 103 11,098
Balance as at 15 September 2023 44 179 (42) 2 10,910 11,093 100 11,193
Total comprehensive income
Profit for the period recognised in the 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 on cash flow hedging position movements - - - 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
Non- controlling interests
Issued capital Other reserves Translation Hedging reserve Retained earnings £m Total equity
£m £m reserve £m £m Total £m
Note £m £m
Balance as at 15 September 2023 44 179 (42) 2 10,910 11,093 100 11,193
Total comprehensive income
Profit for period recognised in income statement - - - - 1,455 1,455 25 1,480
Remeasurements of defined benefit schemes - - - - 38 38 - 38
Deferred tax associated with defined benefit schemes - - - - (10) (10) - (10)
Items that will not be reclassified to profit or loss - - - - 28 28 - 28
Effect of movements in foreign exchange - - (329) - - (329) (20) (349)
Net loss on other investments held at fair value through OCI - (5) - - - (5) - (5)
Current tax on foreign exchange movements - - (2) - - (2) - (2)
Movement in cash flow hedging position - - - (51) - (51) - (51)
Deferred tax on cash flow hedging position movements - - - 13 - 13 - 13
Deferred tax on other investment reserves movements - 1 - - - 1 - 1
Share of other comprehensive income of joint ventures and associates - - (10) - - (10) - (10)
Effect of hyperinflationary economies - - - - 59 59 - 59
Items that are or may be subsequently reclassified to profit or loss - (4) (341) (38) 59 (324) (20) (344)
Other comprehensive income - (4) (341) (38) 87 (296) (20) (316)
Total comprehensive income - (4) (341) (38) 1,542 1,159 5 1,164
Inventory cash flow hedge movements
Amounts transferred to cost of inventory - - - (9) - (9) - (9)
Total inventory cash flow hedge movements - - - (9) - (9) - (9)
Transactions with owners
Dividends paid to equity shareholders - - - - (502) (502) - (502)
Net movement in own shares held - - - - 11 11 - 11
Share buyback (2) 2 - - (568) (568) - (568)
Current tax associated with share-based payments - - - - 2 2 - 2
Dividends paid to non-controlling interests - - - - - - (13) (13)
Total transactions with owners (2) 2 - - (1,057) (1,057) (13) (1,070)
Balance as at 14 September 2024 42 177 (383) (45) 11,395 11,186 92 11,278
1. Operating segments
The Group has five operating segments, as described below. 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, investment properties,
right-of-use assets, operating intangibles and biological assets.
Businesses disposed are shown separately and comparatives are re-presented for
businesses sold or closed during the year. The Group comprises the following
operating segments:
Retail
Buying and merchandising value clothing and accessories through the Primark
and Penneys retail chains.
Grocery
The manufacture of grocery products, including hot beverages, sugar, 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 yeast and bakery ingredients as well as speciality
ingredients focused on enzymes, procession extracts, health and nutrition and
pharmaceutical delivery systems.
Sugar
The growing and processing of sugar beet and sugar cane for production of a
range of sugar and other products in Africa, the UK and Spain.
Agriculture
The manufacture of speciality feed ingredients, premix and compound animal
feed, as well as the provision of other products and services for the
agriculture sector.
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 24 weeks ended 52 weeks ended 24 weeks ended 24 weeks ended 52 weeks ended
1 March 2025 2 March 2024 14 September 2024 1 March 2025 2 March 2024 14 September 2024
£m £m £m £m £m £m
Operating segments
Retail 4,472 4,500 9,448 540 508 1,108
Grocery 2,089 2,124 4,242 227 230 511
Ingredients 1,031 1,056 2,134 120 117 233
Sugar 1,098 1,170 2,529 (16) 125 199
Agriculture 819 850 1,650 12 14 41
Central - - - (46) (45) (100)
9,509 9,700 20,003 837 949 1,992
Business disposed
Sugar
- 34 70 (2) 2 6
9,509 9,734 20,073 835 951 1,998
Geographical information
United Kingdom 3,397 3,585 7,297 269 339 708
Europe & Africa 3,702 3,717 7,830 320 367 754
The Americas 1,237 1,248 2,513 200 213 406
Asia Pacific 1,173 1,150 2,363 48 30 124
9,509 9,700 20,003 837 949 1,992
Business disposed Asia Pacific
- 34 70 (2) 2 6
9,509 9,734 20,073 835 951 1,998
Operating segments for the 24 weeks ended 1 March 2025
Retail Grocery Ingredients Sugar Agriculture Central Total
£m £m £m £m £m £m £m
Revenue from continuing businesses 4,472 2,098 1,126 1,153 823 (163) 9,509
Internal revenue - (9) (95) (55) (4) 163 -
Revenue from external customers 4,472 2,089 1,031 1,098 819 - 9,509
Operating profit 537 219 115 (122) 7 (46) 710
Adjusted operating profit before joint ventures
and associates 540 193 103 (19) 13 (46) 784
Share of adjusted profit after tax from joint
ventures and associates - 34 17 3 (1) - 53
Business disposed - - - (2) - - (2)
Adjusted operating profit 540 227 120 (18) 12 (46) 835
Finance income 27 27
Finance expense (45) (1) (1) (1) - (16) (64)
Other financial income 20 20
Adjusted profit before taxation 495 226 119 (19) 12 (15) 818
Profits less losses on disposal of non-current assets (3) 1 - - - - (2)
Amortisation of non-operating intangibles - (9) (5) - (5) - (19)
Exceptional items - - - (104) - - (104)
Profits less losses on sale and closure of businesses - - - (1) - - (1)
Profit before taxation 492 218 114 (124) 7 (15) 692
Taxation (163) (163)
Profit for the period 492 218 114 (124) 7 (178) 529
Segment assets (excluding joint ventures and
associates) 7,317 2,833 2,156 2,501 664 119 15,590
Investments in joint ventures and associates - 44 128 57 152 - 381
Segment assets 7,317 2,877 2,284 2,558 816 119 15,971
Cash and cash equivalents 758 758
Current asset investments 66 66
Income tax 79 79
Deferred tax assets 237 237
Employee benefits assets 1,572 1,572
Segment liabilities (4,003) (687) (402) (513) (194) (201) (6,000)
Loans and overdrafts (623) (623)
Income tax (134) (134)
Deferred tax liabilities (753) (753)
Employee benefits liabilities (75) (75)
Net assets 3,314 2,190 1,882 2,045 622 1,045 11,098
Non-current asset additions 331 102 95 171 19 5 723
Depreciation and non-cash lease adjustments (281) (50) (38) (45) (14) (2) (430)
Amortisation (18) (10) (6) (2) (6) - (42)
Operating segments
for the 24 weeks ended 2 March 2024
Retail Grocery Ingredients Sugar Agriculture Central Total
£m £m £m £m £m £m £m
Revenue from continuing businesses 4,500 2,134 1,159 1,230 852 (175) 9,700
Internal revenue - (10) (103) (60) (2) 175 -
External revenue from continuing businesses 4,500 2,124 1,056 1,170 850 - 9,700
Business disposed - - - 34 - - 34
Revenue from external customers 4,500 2,124 1,056 1,204 850 - 9,734
Operating profit 508 219 110 121 10 (37) 931
Adjusted operating profit before joint ventures and associates 508 201 99 121 14 (45) 898
Share of adjusted profit after tax from joint ventures and associates - 29 18 4 - - 51
Business disposed - - - 2 - - 2
Adjusted operating profit 508 230 117 127 14 (45) 951
Finance income 35 35
Finance expense (43) - - (1) - (18) (62)
Other financial income (13) (13)
Adjusted profit before taxation 465 230 117 126 14 (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 465 219 110 110 10 (33) 881
Taxation - - - - - (203) (203)
Profit for the period 465 219 110 110 10 (236) 678
Segment assets (excluding joint ventures and associates) 7,181 2,720 2,034 2,541 654 146 15,276
Investments in joint ventures and associates - 51 138 52 155 - 396
Segment assets 7,181 2,771 2,172 2,593 809 146 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 (4,120) (672) (371) (617) (183) (187) (6,150)
Loans and overdrafts (600) (600)
Income tax (95) (95)
Deferred tax liabilities (660) (660)
Employee benefits liabilities (71) (71)
Net assets 3,061 2,099 1,801 1,976 626 1,602 11,165
Non-current asset additions 323 95 78 163 15 2 676
Depreciation and non-cash lease adjustments (266) (48) (32) (43) (11) (3) (403)
Amortisation (17) (12) (6) (1) (5) - (41)
Operating segments for the 52 weeks ended 14 September 2024
Retail Grocery Ingredients Sugar Agriculture Central Total
£m £m £m £m £m £m £m
Revenue from continuing businesses 9,448 4,262 2,342 2,652 1,659 (360) 20,003
Internal revenue - (20) (208) (123) (9) 360 -
External revenue from external customers 9,448 4,242 2,134 2,529 1,650 - 20,003
Business disposed - - - 70 - - 70
Revenue from external customers 9,448 4,242 2,134 2,599 1,650 - 20,073
Operating profit 1,100 493 219 181 31 (92) 1,932
Adjusted operating profit before joint ventures and associates 1,108 438 201 192 33 (100) 1,872
Share of adjusted profit after tax from joint ventures and associates - 73 32 7 8 - 120
Business disposed - - - 6 - - 6
Adjusted operating profit 1,108 511 233 205 41 (100) 1,998
Finance income 71 71
Finance expense (96) (1) (1) (3) (1) (33) (135)
Other financial income 23 23
Adjusted profit before taxation 1,012 510 232 202 40 (39) 1,957
Profits less losses on disposal of non-current assets 3 5 - - - 8 16
Amortisation of non-operating intangibles - (20) (11) - (9) - (40)
Acquired inventory fair value adjustments - (1) (1) - - - (2)
Transaction costs - (2) (2) - (1) - (5)
Exceptional items (11) - - (24) - - (35)
Profits less losses on sale and closure of businesses - - 11 15 - - 26
Profit before taxation 1,004 492 229 193 30 (31) 1,917
Taxation (437) (437)
Profit for the period 1,004 492 229 193 30 (468) 1,480
Segment assets (excluding joint ventures and associates) 7,282 2,798 2,104 2,252 620 89 15,145
Investments in joint ventures and associates - 57 116 53 155 - 381
Segment assets 7,282 2,855 2,220 2,305 775 89 15,526
Cash and cash equivalents 1,323 1,323
Current asset investments 334 334
Income tax 102 102
Deferred tax assets 223 223
Employee benefits assets 1,506 1,506
Segment liabilities (4,347) (685) (415) (437) (178) (172) (6,234)
Loans and overdrafts (613) (613)
Income tax (133) (133)
Deferred tax liabilities (682) (682)
Employee benefits liabilities (74) (74)
Net assets 2,935 2,170 1,805 1,868 597 1,903 11,278
Non-current asset additions 702 212 180 329 43 2 1,468
Depreciation and non-cash lease adjustments (574) (100) (70) (77) (21) (7) (849)
Amortisation (39) (31) (15) (4) (11) - (100)
Geographical information for the 24 weeks ended 1 March 2025
United Kingdom Europe & Africa The Americas Asia Pacific Total
£m £m £m £m £m
Revenue from external customers 3,397 3,702 1,237 1,173 9,509
Segment assets 5,813 6,665 1,902 1,591 15,971
Non-current asset additions 219 336 93 75 723
Depreciation (including of right-of-use assets) (152) (200) (50) (28) (430)
Amortisation (8) (30) (2) (2) (42)
Exceptional items (3) (101) - - (104)
Geographical information for the 24 weeks ended 2 March 2024
United Kingdom Europe & Africa The Americas Asia Pacific Total
£m £m £m £m £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 52 weeks ended 14 September 2024
United Kingdom Europe & Africa The Americas Asia Pacific Total
£m £m £m £m £m
Revenue from external customers 7,297 7,830 2,513 2,433 20,073
Segment assets 5,537 6,599 1,810 1,580 15,526
Non-current asset additions 367 726 209 166 1,468
Depreciation (including of right-of-use assets) (289) (411) (97) (52) (849)
Amortisation (21) (65) (8) (6) (100)
Acquired inventory fair value adjustments - (2) - - (2)
Transaction costs (2) (1) - (2) (5)
Exceptional items (19) (16) - - (35)
The Group's operations in the following countries met the criteria for
separate disclosure:
Revenue Non-current assets
24 weeks ended 24 weeks ended 52 weeks ended 24 weeks ended 24 weeks ended 52 weeks ended
1 March 2025 2 March 2024 14 September 2024 1 March 2025 2 March 2024 14 September 2024
£m £m £m £m £m £m
Australia 713 687 1,409 673 571 656
Spain 948 991 1,972 621 694 713
United States 858 833 1,690 1,012 893 950
2. Exceptional items
2025
At half year, there was a non-cash exceptional impairment charge of £104m in
our Sugar Division. Our Spanish Sugar business, Azucarera, has incurred
operating losses in the first half of the financial year due to the worsening
trading performance of the business. This was considered an indicator of
impairment and based on an assessment, management made the decision to fully
impair the plant and equipment of the business for £101m. The Group has
applied a "fair value less costs of disposal" approach to determine the
recoverable amount using level 3 of the fair value hierarchy as defined in
IFRS 13. The key assumptions to determine the recoverable amount were
assumptions around sugar and beet prices, sugar quantity sold and the discount
rate. The model assumed a discount rate of 8.5%. The Vivergo business has
continued to be impacted by the volatility in margin and a further impairment
charge was was also recognised for £3m on newly acquired property, plant and
equipment.
2024
At half year, there was a non-cash exceptional impairment charge of £6m in
our Sugar Division. The Vivergo business was 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
indicated in the first half of the 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.
3. Income tax expense
24 weeks ended 1 24 weeks ended 2 52 weeks ended
March 2025 March 2024 14 September 2024
£m £m £m
Current tax expense
UK - corporation tax at 25% (2024 - 25%) 11 21 51
Overseas - corporation tax 161 147 337
UK - under provided in prior periods - - 4
Overseas - (over)/under provided in prior periods (3) (3) 10
169 165 402
Deferred tax (credit)/expense
UK - deferred tax 18 34 61
Overseas - deferred tax (25) 3 (16)
UK - over provided in prior periods - - (13)
Overseas - under provided in prior periods 1 1 3
(6) 38 35
Total income tax expense in the income statement 163 203 437
Reconciliation of effective tax rate
Profit before taxation 692 881 1,917
Less share of profit after taxation from joint ventures and associates (51) (49) (117)
Profit before taxation excluding share of profit after taxation from joint 641 832 1,800
ventures and associates
Nominal tax charge at UK corporation tax rate of 25% (2024 - 25%) 160 208 450
Effect of higher and lower tax rates on overseas earnings (38) (43) (92)
Effect of changes in tax rates on the income statement 1 1 7
Expenses not deductible for tax purposes 44 39 101
Disposal of assets covered by tax exemptions or unrecognised capital
losses (3) 3 (9)
Deferred tax not recognised 1 (3) (24)
Adjustments in respect of prior periods (2) (2) 4
Total income tax expense in the income statement 163 203 437
Other comprehensive income or equity
Deferred tax associated with defined benefit schemes 15 17 10
Current tax associated with share-based payments - - (2)
Deferred tax associated with movements in cash flow hedging position 32 (4) (13)
Deferred tax associated with movements in foreign exchange 1 - -
Current tax associated with movements in foreign exchange - - 2
Deferred tax associated with movements in other investment reserves - - (1)
Deferred tax associated with hyperinflationary economies 10 - -
58 13 (4)
The adjusted effective tax rate of 24.1% (2024 H1 - 23.2%) 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 1 March 2025.
The tax impact of adjusting items was calculated on an item-by-item basis.
Pillar Two legislation has been enacted or substantively enacted in certain
jurisdictions in which the Group operates, including the UK. The legislation
is effective for the Group's 2025 financial year. The current tax expense in
respect of Pillar Two for the 24 weeks ended 1 March 2025 is £7m.
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 24 weeks ended 52 weeks ended
1 March 2025 2 March 2024 14 September 2024
pence per share pence per share pence per share
Adjusted earnings per share 83.6 90.4 196.9
Disposal of non-current assets (0.3) 1.1 2.1
Sale and closure of businesses (0.1) (1.4) 3.5
Acquired inventory fair value adjustments (0.1) (0.1) (0.3)
Transaction costs - (0.2) (0.6)
Exceptional items (14.2) (0.8) (4.6)
Tax effect on above adjustments and exceptional tax 4.0 0.3 0.8
Amortisation of non-operating intangibles (2.6) (2.6) (5.4)
Tax credit on non-operating intangibles amortisation 0.7 0.7 1.3
Earnings per ordinary share 71.0 87.4 193.7
5. Dividends
24 weeks ended 24 weeks ended 52 weeks ended 24 weeks ended 24 weeks ended 52 weeks ended
1 March 2 March 14 September 1 March 2 March 14 September
2025 2024 2024 2025 2024 2024
pence per share pence per share pence per share £m £m £m
2023 final and special - 45.8 45.8 - 348 348
2024 interim - - 20.7 - - 154
2024 final and special 69.3 - - 508 - -
69.3 45.8 66.5 508 348 502
The 2024 final dividend of 42.3p approved by shareholders on 13 December 2024,
together with the special dividend of 27.0p totalled £508m when paid on 10
January 2025. The 2025 interim dividend of 20.7p per share, totalling an
estimated cost of £149m will be paid on 4 July 2025 to shareholders on the
register on 30 May 2025.
6. Acquisitions and disposals
Acquisitions
2025
No material or significant businesses were acquired in the first half of the
financial year.
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.
Disposals
2025
No material or significant businesses were disposed of in the first half of
the financial year.
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.
7. Analysis of net debt
At 14 September Cash flow New leases, non- cash items and Exchange At 1 March 2025
2024 £m transfers adjustments £m
£m £m £m
Short-term loans (71) 35 - (1) (37)
Long-term loans (454) 5 - (5) (454)
Lease liabilities (3,065) 169 (95) 18 (2,973)
Total liabilities from financing activities (3,590) 209 (95) 12 (3,464)
Cash at bank and in hand, cash equivalents
and overdrafts 1,235 (616) - 7 626
Current asset investments 334 (268) - - 66
Net debt including lease liabilities (2,021) (675) (95) 19 (2,772)
24 weeks ended 24 weeks ended 52 weeks ended
Reconciliation of net debt to balance sheet 1 March 2025 2 March 2024 14 September 2024
£m £m £m
Cash and cash equivalents 758 1,268 1,323
Current asset investments 66 - 334
Current loans and overdrafts (169) (168) (159)
Non-current loans (454) (432) (454)
Net cash before lease liabilities 201 668 1,044
Lease liabilities (2,973) (3,164) (3,065)
Net debt including lease liabilities (2,772) (2,496) (2,021)
24 weeks ended 24 weeks ended 52 weeks ended
Roll forward of the liabilities associated with interest paid 1 March 2025 2 March 2024 14 September 2024
£m £m £m
Opening balance (25) (25) (25)
Interest expense (64) (62) (135)
Interest paid 66 55 140
Interest capitalised (5) - (5)
Effect of hyperinflationary economies - 3 -
Closing balance (28) (29) (25)
8. 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 14 September 2024. There have been no material changes in
these relationships in the 24 weeks ended 1 March 2025 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.
9. 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 £1,506m (H1 2024 - £1,476m; 2024 full year - £1,454m). The
increase from the end of the last financial year reflects a decrease in the
pension liabilities due to an increase in corporate bond yields, partially
offset by negative asset returns and a slight increase in the long term
expected inflation assumption.
10. 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 1 March 2025 comprise those of the Company and
its subsidiaries (together referred to as 'the Group') and the Group's
interests in joint ventures and associates.
The consolidated financial statements of the Group for the 52 weeks ended 14
September 2024 are available upon request from the Company's registered office
at 10 Grosvenor Street, London, W1K 4QY or at www.abf.co.uk
(http://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 14 September 2024.
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 2026 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
2026 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 1.0x and the Group had
total cash, cash equivalent and current asset investments of £0.8bn and an
undrawn committed Revolving Credit Facility of £1.5bn.
In February 2025, 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. 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, high levels of volatility in key
commodity prices without price adjustments, adverse impact from the changes to
import tariffs, adverse movement to the cash conversion cycle within the Group
and server IT outages leading to extended periods of non- operation. 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, annual profit before tax would need to decline by 30% 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 183 to 194 of the 2024 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 29 April 2025. 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 14 September 2024 have been
abridged from the Group's 2024 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.
11. 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 14 September 2024 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 14 September 2024. In line with the change in presentation of
investment properties in the prior year, the comparative half year balance
sheet has been re-presented. The reclassification for the 2024 half year
balance sheet was £110m.
New accounting standards
The following accounting standards, amendments and clarifications were adopted
in the period with no significant impact:
- Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
- Classification of Liabilities as Current or Non-Current (Amendments to
IAS 1 Presentation of Financial Statements)
- Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
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:
- Lack of Exchangeability (Amendments to IAS 21), effective 2026 financial
year
- Annual Improvements to IFRS Accounting Standards - Volume 11, effective
2027 financial year
- IFRS 18 Presentation and Disclosure in Financial Statements, effective
2028 financial year
- IFRS 19 Subsidiaries without Public Accountability: Disclosures,
effective 2027 financial year
- Amendments to the Classification and Measurement of Financial
Instruments (Amendments to IFRS 9 and IFRS 7), effective 2027 financial year
- Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9
and IFRS 7), effective 2027 financial year
12. 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 14 September
2024.
13. Alternative performance measures
In reporting financial information, the Board uses various 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 Definition/purpose Reconciliation/calculation
IFRS measure
Like-for-like sales No direct equivalent The like-for-like sales metric enables measurement of the performance of our Consistent with the definition given
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 year.
Adjusted operating (profit) margin No direct equivalent Adjusted operating (profit) margin is Adjusted operating profit as a See note A
percentage of revenue.
Adjusted operating profit Operating profit Adjusted operating profit is stated before amortisation of non- operating A reconciliation of this measure is provided on the face of the condensed
intangibles, transaction costs, amortisation of fair value adjustments made to consolidated income statement and by operating segment in note 1
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.
Adjusted profit before tax Profit before tax Adjusted profit before tax is stated before amortisation of non- operating A reconciliation of this measure is provided on the face of the condensed
intangibles, transaction costs, amortisation of fair value adjustments made to consolidated income statement and by operating segment in note 1
acquired inventory, profits less losses on disposal of non-current assets,
profits less losses on sale and closure of businesses 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 profit before
tax.
Adjusted earnings and Adjusted earnings per share Earnings and earnings per share Adjusted earnings and Adjusted earnings per share are stated before Reconciliation of this measure is provided in note 4
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, profits less losses on sale and closure of
businesses and exceptional items, 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 and
Adjusted earnings per share.
Exceptional items No direct equivalent Exceptional items are items of income and expenditure which are significant Exceptional items are included on the face of the condensed consolidated
and unusual in nature and are considered of such significance that they income statement with further detail provided in note 2
require separate disclosure on the face of the income statement.
Constant currency Revenue and Adjusted operating profit (non-IFRS) measure Constant currency measures are derived by translating the relevant prior year See note B
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 four countries where the Group has operations in this
position - Argentina, Malawi, Turkey and Venezuela.
Effective tax rate No direct equivalent This measure is the tax charge for the year expressed as a percentage of Whilst the effective tax rate is not disclosed, a reconciliation of the tax
profit before 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 This measure is the tax charge for the year excluding tax on adjusting items The tax impact of reconciling items between profit before tax and adjusted
expressed as a percentage of Adjusted profit before tax profit before tax is shown in note 4
Dividend cover No direct equivalent Dividend cover is the ratio of Adjusted earnings per share to dividends per See note C
share relating to the period
Capital expenditure No direct equivalent Capital expenditure is a measure of investment in non-current assets in See note D
existing businesses. It comprises cash outflows from the purchase of property,
plant and equipment and intangibles.
Gross investment No direct equivalent Gross investment is a measure of investment in non-current assets in existing See note E
businesses and acquisition of new businesses. It comprises capital
expenditure, cash outflows from the purchase of subsidiaries, joint ventures
and associates, additional shares in subsidiary undertakings purchased from
non-controlling interests and other investments.
Net cash/debt before lease liabilities No direct equivalent This measure comprises cash, cash equivalents and overdrafts, current asset A reconciliation of this measure is shown in note 7
investments and loans.
Net cash/debt including lease liabilities No direct equivalent This measure comprises cash, cash equivalents and overdrafts, current asset A reconciliation of this measure is shown in note 7
investments, loans and lease liabilities.
Adjusted EBITDA Adjusted operating profit (non-IFRS) measure Adjusted EBITDA is stated before depreciation, amortisation and impairments See note F
charged to Adjusted operating profit.
Financial leverage ratio No direct equivalent Financial leverage is the ratio of net cash/debt including lease liabilities See note F
to Adjusted EBITDA.
Free cash flow No direct equivalent This measure represents the cash that the Group generates from its operations See note G
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 (2024 H1 - £1m)
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.
Total liquidity No direct equivalent Total liquidity comprises cash, cash equivalents and current asset See note H
investments, less non-qualifying borrowings and an estimate of inaccessible
cash, plus the qualifying credit facilities.
Cash, cash equivalents and current asset investments are set out in note 7.
Non-qualifying borrowings are current loans and overdrafts and any non-current
borrowings that are uncommitted or that contain covenants that could be
breached in a severe downside scenario.
Current loans and overdrafts are set out in note 7.
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 and cash equivalents.
Qualifying credit facilities have a maturity of more than 18 months, are
committed, and either contain no performance covenants, or where they do, they
are assessed as highly unlikely to be breached even in a severe downside
scenario. At 1 March 2025, this comprised the RCF.
(Average) capital employed No direct equivalent Capital employed is derived from the management balance sheet and does not Consistent with the definition given
reconcile directly to the statutory balance sheet. All elements are calculated
in accordance with Adopted IFRS.
Average capital employed for each segment and for the Group is calculated by
averaging capital employed for each period of the year based on the reporting
calendar of each business.
Return on (average) capital employed No direct equivalent This measure expresses Adjusted operating profit as a percentage of Average Consistent with the definition given
capital employed.
(Average) working capital No direct equivalent Working capital is derived from the management balance sheet and does not Consistent with the definition given
reconcile directly to the statutory balance sheet. All elements are calculated
in accordance with Adopted IFRS.
Average working capital for each segment and for the Group is calculated by
averaging working capital for each period of the year based on the reporting
calendar of each business.
(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
Retail Grocery Ingredients Sugar Agriculture Central and disposed business Total
£m £m £m £m £m £m £m
24 weeks ended 1 March 2025
External revenue from continuing businesses 4,472 2,089 1,031 1,098 819 - 9,509
Adjusted operating profit 540 227 120 (16) 12 (48) 835
Adjusted operating margin % 12.1% 10.9% 11.6% (1.5%) 1.5% 8.8%
24 weeks ended 2 March 2024
External revenue from continuing businesses 4,500 2,124 1,056 1,170 850 34 9,734
Adjusted operating profit 508 230 117 125 14 (43) 951
Adjusted operating margin % 11.3% 10.8% 11.1% 10.7% 1.7% 9.8%
Note B Retail Grocery Ingredients Sugar Agriculture Central and disposed business Total
£m £m £m £m £m £m £m
24 weeks ended 1 March 2025 4,472 2,089 1,031 1,098 819 - 9,509
External revenue from continuing businesses at actual rates
24 weeks ended 2 March 2024
External revenue from continuing businesses at actual rates 4,500 2,124 1,056 1,170 850 34 9,734
Impact of foreign exchange (87) (45) (42) (24) (6) - (204)
External revenue from continuing businesses at constant currency 4,413 2,079 1,014 1,146 844 34 9,530
% change at constant currency +1% in line +2% -4% -3% in line
Retail Grocery Ingredients Sugar Agriculture Central and disposed business Total
£m £m £m £m £m £m £m
24 weeks ended 1 March 2025
Adjusted operating profit at actual rates 540 227 120 (16) 12 (48) 835
24 weeks ended 2 March 2024
Adjusted operating profit at actual rates 508 230 117 125 14 (43) 951
Impact of foreign exchange (6) (5) (6) (8) (1) - (26)
Adjusted operating profit at constant currency 502 225 111 117 13 (43) 925
% change at constant currency +8% +1% +8% -114% -8% -10%
Note C
24 weeks ended 1 24 weeks ended 2 52 weeks ended
March 2025 March 2024 14 September
2024
Adjusted earnings per share (in pence) 83.6 90.4 196.9
Dividend relating to the period (in pence) - excluding special dividend
proposed 20.7 20.7 63.0
Dividend cover 4 4 3
Note D
24 weeks ended 1 24 weeks ended 2 52 weeks ended
March 2025 March 2024 14 September 2024
From the cash flow statement £m £m £m
Purchase of property, plant and equipment 490 523 1,124
Purchase of intangibles 63 42 60
Capital expenditure 553 565 1,184
Note E
24 weeks ended 1 24 weeks ended 2 52 weeks ended
March 2025 March 2024 14 September
From the cash flow statement £m £m 2024
£m
Purchase of property, plant and equipment 490 523 1,124
Purchase of intangibles 63 42 60
Purchase of subsidiaries, joint ventures and associates 1 4 93
Purchase of other investments 3 2 4
Gross investment 557 571 1,281
Note F
24 weeks ended 1 24 weeks ended 2 52 weeks ended
March 2025 March 2024 14 September
£m £m 2024
£m
Adjusted operating profit 835 951 1,998
Charged to adjusted operating profit:
Depreciation of property, plant and equipment and investment
properties 294 264 555
Amortisation of operating intangibles 25 23 63
Depreciation of right-of-use assets and non-cash lease adjustments 136 139 294
Adjusted EBITDA 1,290 1,377 2,910
Net debt including lease liabilities (2,772) (2,496) (2,021)
Financial leverage ratio (based on the last 12 months rolling adjusted
EBITDA) 1.0x 0.9x 0.7x
Note G
24 weeks ended 1 24 weeks ended 2 52 weeks ended
March 2025 March 2024 14 September
£m £m 2024
£m
sAdjusted EBITDA (see note F) 1,290 1,377 2,910
Repayment of lease liabilities net of incentives received (158) (148) (308)
Working capital (318) 6 305
Capital expenditure (see note D) (553) (565) (1,184)
Purchase of subsidiaries, joint ventures and associates (1) (4) (93)
Sale of subsidiaries, joint ventures and associates (1) - 24
Net interest paid (39) (29) (69)
Income taxes paid (147) (145) (340)
Share of adjusted profit after tax from joint ventures and associates (53) (51) (120)
Dividends received from joint ventures and associates 54 43 105
Other (47) (16) 125
Free cash flow 27 468 1,355
Note H
24 weeks ended 1 24 weeks ended 2 52 weeks ended
March 2025 March 2024 14 September
£m £m 2024
£m
Cash and cash equivalents 758 1,268 1,323
Current asset investments 66 - 334
Current loans and overdrafts (169) (168) (159)
Non-qualifying non-current borrowings* (62) - (63)
Estimated inaccessible cash (38) (63) (66)
Qualifying credit facilities 1,500 1,500 1,500
Total liquidity 2,055 2,537 2,869
*At 1 March 2025, non-current borrowings on the face of the balance sheet
included the £400m public bond due in 2034 (carrying value £392m) as
qualifying borrowings.
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 George Weston Joana Edwards
Chairman Chief Executive Interim Finance Director
29 April 2025
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 1 March
2025 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 1 March 2025 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
29 April 2025
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