ABF: announces encouraging first half 2020 results

London / UK. (abf) Food, ingredients and retail group Associated British Foods PLC (ABF) announced its first half 2020 interim financial results, covering the 24 weeks ended 29 February. Overview:

Financial Headlines

2019 IFRS 16 pro forma 2019 IFRS 16 pro forma 2019 as reported
Actual currency Constant currency Actual currency
Group revenue GBP 7,646 mio. +2% +3% +2%
Adjusted operating profit GBP 682 mio. +2% +3% +7%
Adusted profit before tax GBP 636 mio. +3% +1%
Adjusted earnings per share GBP 61.8 Pence +3% +1%
Dividend per share nil
Gross investment GBP 363 mio.
Net cash (before lease liabilities) GBP 801 mio.
Net debt (including lease liabilities) GBP 2,751 mio.
Statutory operating profit GBP 349 mio. -38% -35%
Statutory profit before tax GBP 298 mio. -41% -42%
Basic earnings per share GBP 27.5 Pence -43% -44%

Statutory operating profit is stated after exceptional charges of GBP 309 million. We have carefully reviewed the inventory on hand at Primark and, to reflect an expected lower net realisable value on some inventory when our stores reopen, this charge includes a GBP 284 million provision.

Chief Executive George Weston said: «The group delivered an encouraging trading performance in the first half. The rapid spread of Covid-19 has impacted all of our lives and the human tragedy that continues to unfold has shocked and saddened us all. We are a strong, diversified and resilient group. Our people are working hard to maintain supply from our food businesses. Primark is managing through an extraordinarily challenging period after all of its stores closed in March and our management response to mitigate the cash outflows was swift and proportionate. Although uncertainty remains, we have the people and the cash resources to meet the challenges ahead.»

Adjusted operating profit is stated before the amortisation of non-operating intangibles, profits less losses on disposal of non-current assets, transaction costs, amortisation of acquired inventory fair value adjustments and exceptional items. These items, together with profits less losses on the sale and closure of businesses, are excluded from adjusted profit before tax and adjusted earnings per share. References to operating profit in the Operating Review are based on this adjusted operating profit measure.

The 2019 results have been provided on an IFRS 16 pro forma basis in addition to the results previously reported under IAS 17 in order to provide a better understanding of comparison between the 2020 results and the 2019 results. These IFRS 16 pro forma figures have been prepared using the same data and assumptions as those used for the transition adjustment.

Constant currency figures are derived by translating the 2019 results on an IFRS 16 pro forma basis at 2020 average exchange rates, except for Argentina and Venezuela where consumer price inflation has escalated to extreme levels, in which case actual exchange rates are used.

For additional information please read ABFoods’ statement below (568 KB):