Annual Results

Associated British Foods PLC

Nov 05 2024 07:00 GMTSource: RNS

RNS Number : 9165K

Associated British Foods PLC

05 November 2024

FOR RELEASE 5 November 2024

Annual Results Announcement

Year ended 14 September 2024

Associated British Foods plc results for the 52 weeks ended 14 September 2024

Financial headlines

	2024	2023	Actual currency	Constant currency
Group revenue	£20,073m	£19,750m	+2%	+4%
Adjusted operating profit	£1,998m	£1,513m	+32%	+38%
Adjusted profit before tax	£1,957m	£1,473m	+33%
Adjusted earnings per share	196.9p	141.8p	+39%
Operating profit	£1,932m	£1,383m	+40%
Profit before tax	£1,917m	£1,340m	+43%
Basic earnings per share	193.7p	134.2p	+44%
Gross investment	£1,281m	£1,171m	+9%
Free cash flow	£1,355m	£269m
Net cash before lease liabilities	£1,044m	£895m
Total net debt	£(2,021)m	£(2,265)m
Return on Average Capital Employed ('ROACE')	18.1%	13.6%
Total dividends per share	90.0p	60.0p

Adjusted operating profit is derived from operating profit after taking certain charges and credits as shown on the face of the consolidated income statement. The Group has defined and outlined the purpose of its Alternative performance measures ('APMs') in note 13. These measures are used within the Financial Headlines and in this Annual Results Announcement.

References to changes in revenue and adjusted operating profit in the following commentary are based on constant currency unless stated otherwise.

George Weston, Chief Executive of Associated British Foods, said:

"This was a year of very strong financial and operational progress across the Group. We delivered a substantial improvement in profitability, excellent cash generation and strong returns as a result of consistent, multi-year investment and a return to some normality in our markets and supply chains. Above all, these results reflect the excellent work and disciplined focus of our people.

Primark achieved good sales growth this year and I am particularly pleased with the significant recovery in margin. Our low-cost model is as strong as ever, as we maintain our relentless focus on delivering great-value clothing and a unique store experience. This is underpinned by a step up in investment in strategic initiatives across digital, product and brand. Significant white space for new stores remains across Europe and the US, which we expect to help drive sustainable growth over the medium and long term. Our food businesses delivered good growth and strong profitability this year. We are benefitting from an easing in input costs, as well as our increased investment in marketing, strong commercial execution and good product innovation.

Looking ahead, the Group is well-positioned. Strong cash flow generation is enabling disciplined capital allocation to growth opportunities across the Group and we have ongoing multi-year projects to deliver our focused sustainability priorities. We believe our long-term, patient investment approach will deliver strong returns and continue to create value for all stakeholders."

Group performance

●	Revenue growth of 4% driven by both Retail and food businesses
●	Significant growth in adjusted operating profit, up 38%, reflecting strong margin recovery to 10.0% across the Group
●	Adjusted EPS increased by 39% to 196.9p and basic EPS increased by 44% to 193.7p
●	Gross investment of £1.3bn, adding capacity, capabilities, new technology and strategic acquisitions
●	Good progress delivering our focused sustainability priorities, particularly decarbonisation
●	Free cash flow of £1,355m driven by significant growth in operating profit and improvement in working capital
●	Group return on average capital employed increased from 13.6% to 18.1%

Segmental performance

●	Retail sales growth and significant margin recovery
	●	Revenue growth of 6% to £9.4bn
	●	Significant increase in adjusted operating profit, up 51% to £1.1bn, with margin recovery to 11.7%, up from 8.2% in 2023
	●	Strong performance across key growth markets, the US, France, Spain, Italy and Central and Eastern Europe, as well as growth in our largest market, the UK
	●	Continued good execution of store rollout programme in Europe and the US
	●	Benefitting from the relevance of our great-value clothing, unique store experience and increased digital engagement
●	Grocery sales up 4% and adjusted operating profit up 17%, reflecting strong margin improvement overall while investing in marketing
●	Ingredients sales growth of 2% and adjusted operating profit up 12%, led by yeast and bakery ingredients
●	Sugar sales and adjusted operating profit strongly ahead of 2023, although European sugar prices reduced sharply in Q4 2024 as previously announced
●	Agriculture adjusted operating profit increased 3%

Shareholder returns

●	Strong balance sheet with leverage ratio of 0.7x times at year end
●	Increased total dividend by 50% to 90.0p per share, comprising interim dividend of 20.7p per share, final declared dividend of 42.3p per share and special dividend of 27.0p per share
●	Completed £565m of share buybacks in 2024; additional tranche of £100m completed in 2025 to-date
●	Announcing further share buyback programme of £500m, expected to be completed before the end of financial year 2025

Outlook

Primark is targeting mid-single digit sales growth in 2025 as we continue to execute our store rollout programme in our growth markets in Europe and the US and to focus on like-for-like sales growth in our more mature markets. This will be supported by investment in initiatives across product, digital and brand. We expect adjusted operating margin to remain broadly in line with this year's level, as gross margins stabilise and we step up investment to drive sustainable growth. Over the medium and long term, we continue to have significant white space opportunities in our growth markets. We are targeting our store rollout programme to contribute around 4% to 5% per annum to Primark's total sales growth for the forseeable future.

In Grocery, we will continue to drive sales momentum, underpinned by increased marketing investment. As expected, the strong performance in our US-focused businesses during 2024 began to normalise towards the end of the year and we expect to see the full year effect in 2025. In Ingredients, we expect continued growth in yeast and bakery ingredients and improved growth in specialty ingredients.

In Sugar, as previously announced, we expect the reduction in European sugar pricing in Q4 2024 to impact performance in our sugar business significantly in 2025, with adjusted operating profit for the overall Sugar segment expected to be in the range of £50m to £75m. However, we expect profitability to recover in 2026 to be more in line with 2024, as a result of the lower beet prices that have been contracted and a rebalancing of supply and demand in the market. In Agriculture, we expect some improvement, particularly as our grain trading business recovers in the UK.

The Group is well positioned for the medium term, supported by strong cash generation and good momentum in our Retail and food businesses.

For further information please contact:

Associated British Foods:

Tel: +44 20 7399 6545

Eoin Tonge, Finance Director

Lucinda Baker, Head of Investor Relations

Chris Barrie, Corporate Affairs Director

Citigate Dewe Rogerson:

Tel: +44 20 7638 9571

Kevin Smith	Tel: +44 7710 815924
Angharad Couch	Tel: +44 7507 643004

There will be an analyst and investor presentation at 09.00am GMT today which will be streamed online and accessed via our website here.

Notes to editors

Associated British Foods is a diversified international food, ingredients and retail group with revenue 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

	2024	2023	Actual currency	Constant currency
Revenue £m	9,448	9,008	+5%	+6%
Adjusted operating profit £m	1,108	735	+51%	+51%
Adjusted operating profit margin	11.7%	8.2%
Operating profit £m	1,100	717	+53%
Return on average capital employed	18.7%	12.0%

Primark's sales grew 6% in the year. This reflects a strong performance across our key growth markets, including the US, France, Spain, Italy and Central and Eastern Europe ('CEE'), as well as growth in our largest market, the UK. We continued to benefit from the relevance of our great-value clothing and the expansion of our product and category offering, including through collaborations and licensing partnerships. We are also successfully executing our store rollout programme across the US and Europe, which is adding profitable new selling space. This year's growth reflects investment in recent years to enhance our unique store experience and to increase our use of effective digital customer engagement.

Most of our key categories performed well this year as we continued to deepen and broaden our product offering in women's, men's and kidswear, while growing our presence in categories such as home and accessories. We believe our expanded product ranges are further differentiating our proposition and increasing our appeal to existing and new customers.

Growth in womenswear was led by performance and leisurewear, knitwear and nightwear. Our collaboration ranges, including Rita Ora and Paula Echevarría, contributed strongly to growth and we benefitted from continued expansion of the Edit collection, our more premium essentials range. Sales of our seasonal summer clothing, as well as footwear, beachwear and swimwear, were impacted by wet weather in the UK and Ireland during H2. Menswear delivered good growth, with particularly strong sales of leisurewear and good growth in shirts. We benefitted from our expanded product range, including our premium collaborations via our Kem collection and LA workwear brand, The Stronghold. Licensed sportswear lines with the NBA, NFL and Kappa also performed well. In kidswear, sales of our licensed ranges, including partnerships with global brands such as Disney, the NBA and gaming brands, performed very strongly. Markdowns during the year were managed effectively and we exited the year with good inventory levels.

In Spain and Portugal, which accounted for 17% of sales, our sales grew strongly, up 6%. Sales grew 4% in H1 and 7% in H2. Growth in Spain reflected the sales contribution from space expansion and good execution. We continued to outperform the market, which was relatively flat in the year. In Portugal, sales in H1 were impacted by market challenges, followed by an encouraging improvement in H2. During the year, we opened five new stores in Spain. This included four stores in Madrid, where we now have 12 stores in total.

In France and Italy, which accounted for 16% of sales, we had some of the strongest growth, with sales growing 12% in the year. Sales grew 18% in H1 and 8% in H2. Growth includes a strong sales contribution from new stores and we continued to gain share in both markets. In Italy, overall sales densities continued to be particularly strong. We opened three new stores in France and two new stores in Italy.

In our newer markets in Central and Eastern Europe, which accounted for 3% of sales, our sales grew 42%. Sales grew 48% in H1 and 37% in H2. We opened three new stores in the year, including our first store in Hungary, one store in Poland and one store in Romania.

In the US, which accounted for 5% of sales, our sales grew 30%, reflecting continued good progress. Sales grew 38% in H1 and 24% in H2. We opened six new stores in the year, including our second store in Florida and our first stores in Virginia, North Carolina and Michigan. We also opened a new distribution centre in Jacksonville, Florida, which will support our continued expansion in southern states. Recently opened stores performed well and are positively contributing to our overall sales density in the US. Sales in the year were driven by both womenswear and menswear, with licensed products performing particularly well. Primark recently launched its first US marketing campaign in the New York metro area as we focus on increasing brand awareness with US customers. We continue to execute our store rollout programme, with 14 leases for new stores now signed¹, including our first store in Manhattan, New York, which will be our 11th store in New York state.

In the UK and Ireland, which accounted for 47% of sales, our sales grew 2%. In the UK and Ireland, like-for-like sales grew 0.7%, reflecting 3.1% growth in H1 and a 1.6% decline in H2. In both markets, challenging weather impacted footfall during H2, particularly in April and June. However, we had a very encouraging start to sales of our Autumn/Winter ranges, with strong like-for-like growth in both markets in the last weeks of the financial year. For 2024 as a whole, like-for-like sales in the UK grew 1.0%, reflecting 3.6% growth in H1 and a 1.3% decline in H2. Primark maintained its market share in the UK at 6.7%². During the year, we continued to expand and optimise our store portfolio in the UK and Ireland. In total, we opened three new stores. In the UK, we also extended two existing stores, right-sized one store and relocated two stores. We are now offering a Click & Collect service in 87 stores¹ in the UK and expect this to be available in all stores in England, Wales and Scotland by the end of 2025.

In our Northern European markets, Germany, the Netherlands, Belgium and Austria, which accounted for 13% of sales, our sales grew 3%. In H1, sales grew 1% and in H2, sales grew 4%. Like-for-like sales grew 6.1% in 2024, with 5.6% growth in H1 and 6.6% growth in H2. In Germany, we restructured our store footprint with three store closures and three right-sizings in the year. The restructuring contributed to strong like-for-like sales in the remaining stores, with much-improved sales densities and profitability, despite industry-wide strike action. Even with the reduction in selling space, total sales grew in H2. We also launched our first multi-media brand marketing campaign in the country. During the year, we signed leases for two smaller-sized stores in new locations in Germany. In the Netherlands, like-for-like growth was also very strong, benefitting from our commercial and operational actions, including the right-sizing of four stores.

Overall, Primark's total like-for-like sales grew 1.2%. In H1, like-for-like sales grew 2.1%, driven by the annualisation of last year's carefully-selected price increases. In H2, like-for-like sales grew 0.5%, with a positive product mix benefit more than offsetting the impact of soft volumes, mainly due to unfavourable weather in the UK and Ireland. As expected in our fastest-growing markets such as the US, Italy and France, like-for-like metrics are impacted by the high number of store openings.

As at 14 September 2024, we were trading from 451 stores across 17 markets, with 18.8m sq ft of selling space. During the year, we opened a total of 22 new stores, closed three stores, extended five stores, right-sized eight stores and relocated two stores, which increased our retail selling space by 0.8m sq ft on a gross basis and by 0.6m sq ft on a net basis. We also made good progress with our store refurbishment programme, completing refits in 23 stores comprising 0.8m sq ft of selling space.

We continue to see significant white space opportunities in our growth markets in Europe and in the US and we have a clear roadmap for new store rollouts over the medium and long term to drive sustainable growth. At the same time, we continue to assess expansion opportunities in new markets. We recently signed an agreement with the Alshaya Group to explore the opportunity to open stores in the Gulf Cooperation Council ('GCC') markets. We are targeting our store rollout programme to contribute around 4% to 5% per annum to Primark's total sales growth for the foreseeable future.

We are focused on a number of initiatives to drive digital customer engagement, in particular in the UK where we have made the most investment and progress. In 2024, traffic to our websites increased in all markets and grew by 23% overall. The number of visitors now using the stock checker facility in each market is in the range of 15% to 25% and the total usage increased by 35% in 2024. We believe that the increase in website traffic is being driven by our investment in Search Engine Optimisation ('SEO'), our CRM database and activity, and our paid digital marketing. In particular, our CRM database now has approximately three million customers. Overall, we believe our increased digital engagement is contributing to higher footfall in stores and overall sales growth.

Adjusted operating profit grew 51% to £1,108m. Adjusted operating profit margin was 11.7%, up from 8.2% in 2023. This margin recovery reflects an increase in gross margin, largely due to lower material costs and reduced realised freight costs, as well as the annualisation of prior year price increases. These benefits were partially offset by labour cost inflation and an increase in investment in digital and data capabilities, technology and brand marketing to support long-term growth. We expect this investment to continue over the medium term. We continue to focus on driving cost optimisation and efficiencies, including through the store operating model, the introduction of self-service checkouts ('SCOs') and energy cost efficiencies.

This was another year of significant investment to support future growth, captured within operating expense as noted above, and in the £530m of gross investment in capital projects in 2024. As well as opening new stores in Europe and the US, we made progress with our store refurbishment programme, including the rollout of SCOs and energy-efficient lighting upgrades. We are supporting growth with investment in depots, including new depots and several ongoing automation projects. We have significantly increased our investment in technology, including the capability build to support long-term growth. In 2024, return on average capital employed increased from 12.0% to 18.7%. This primarily reflects the increase in operating profit and a normalisation in net working capital.

We continued to make progress with our sustainability priorities. Primark has committed to 100% of the cotton in its clothing being either organic, recycled or made from cotton from its Primark Cotton Project by 2027. In 2024, 57% of its cotton clothing units sold contained cotton that was organic or recycled or from the Primark Cotton Project. This was up from 46% last year. The Science Based Target Initiative has approved Primark's near-term target to reduce absolute Scope 1 and 2 greenhouse gas (GHG) emissions and absolute Scope 3 GHG emissions from purchased goods and services respectively by 50% by 2030 from a 2019 baseline. Primark total Scope 3 GHG emissions, which represent the biggest portion of its footprint, reduced by 12% in 2024 compared to 2023 and were 0.6% lower than the 2019 baseline. Primark is investing in its Environmental Sustainability Team and in supplier factory efficiency programmes aimed at supporting GHG emission reductions through targeted training, upskilling, and energy-saving projects. Considering its planned geographical expansion, Primark expects this measure to fluctuate in the short-term. Primark's Scope 1 and 2 (market-based) emissions reduced by 21% in 2024 compared to 2023 and were 52% lower than the 2019 baseline. This reduction was achieved through energy efficiency measures in its stores and the procurement of renewable and low-carbon electricity.

1.	As at 1 November 2024
2.	Kantar, Primark market share of the total UK clothing, footwear and accessories market including online by value, 52-week data to 15 September 2024

Grocery

	2024	2023	Actual currency	Constant currency
Revenue £m	4,242	4,198	+1%	+4%
Adjusted operating profit £m	511	448	+14%	+17%
Adjusted operating profit margin	12.1%	10.7%
Operating profit £m	493	402	+23%
Return on average capital employed	35.8%	30.0%

Grocery sales grew 4%, reflecting good demand across a number of our leading international brands and regionally-focused businesses, supported by increased investment in effective marketing, strong commercial execution and successful new product launches.

Adjusted operating profit margin for the Grocery segment improved to 12.1% overall, driving significant growth in adjusted operating profit, up 17% to £511m. The strong margin improvement reflects an easing in input cost pressures, strong performance in our US-focused businesses and much-reduced losses in Allied Bakeries, partially offset by a significant increase in marketing investment. Return on average capital employed increased from 30.0% to 35.8%.

Our international brand businesses, which include Twinings, Ovaltine, Blue Dragon, Patak's, Jordans and Mazzetti, accounted for approximately a third of total Grocery sales. Twinings had strong sales momentum led by volume growth across its largest markets, the UK, US and France. This reflects increased distribution, particularly in the US, strong commercial execution to strengthen in-store visibility and a significant increase in investment and focus on effective marketing. Growth also benefitted from recent product launches, as we continue to expand our presence in the wellness category, including our growing portfolio of herbal and infusion teas.

In Ovaltine, performance was mixed this year. We continued to drive sales of ready-to-drink ('RTD') products in Thailand, in response to the shift in consumer demand from powder products, and we grew our market share in both categories.³ We are leveraging our strong brand in that market to launch new products, supported by increased marketing investment. In China, sales were impacted by the weaker economy and in Myanmar by the political situation. In Europe, we benefitted from new product launches and we had good growth in Africa. We also progressed with the construction of a production facility in Nigeria, which will enable Ovaltine to serve markets across West Africa. Sales of both Patak's and Blue Dragon were broadly flat overall this year with a mixed performance across markets. Jordans sales were impacted by reduced promotional activity in H1 but had good growth in H2. Our balsamic vinegar business, including the Mazzetti brand, had continued good volume growth.

Within our regionally-focused portfolio, our US-focused businesses accounted for approximately 15% of Grocery sales and performed well. This reflects the strong performance of our market-leading brands, including Mazola and Fleischmann's, supported by improved production capacity. As expected, strong performance in consumer oils began to normalise towards the end of the financial year. Stratas, our joint venture that supplies oils to the foodservice, ingredients and retail markets, delivered strong profit, albeit slightly below last year.

Our UK-focused businesses, which accounted for approximately a quarter of Grocery sales, generally performed well. Allied Bakeries had a much-reduced operating loss compared to 2023 as a result of improved sales and operational performance. Silver Spoon delivered strong growth, benefitting from better pricing and a brand refresh. Ryvita made good progress, supported by recent product launches and advertising. We are investing in manufacturing capacity for our Scrocchiarella bakery products in Bradford, UK, to support future growth.

Our Australia and New Zealand-focused businesses, which accounted for approximately a quarter of Grocery sales, remained resilient in a challenging consumer environment. Our Tip Top bakery business grew well despite consumers trading down due to cost of living pressures. Sales growth in our Don meat business reflected pricing and new product launches, however profitability was impacted by higher input costs. Yumi's, which produces dips and vegetarian snacks, delivered good growth in sales and profitability. During the year, we made further progress with the evolution of our product portfolio, completing the acquisition of The Artisanal Group, a leading manufacturer and wholesaler of high‐quality baked goods in Australia, primarily serving cafes, restaurants and hotels. Our investment in long-term capital projects in Australia continued, including the expansion of the Canning Vale bakery in Western Australia to secure Tip Top's position as the leading supplier in that state, as well as investing in capacity expansion in Springwood, Queensland, to support Tip Top's foodservice growth.

3.	Nielsen, Ovaltine share by value of the malt-based and chocolate powder beverages category and the malt-based and chocolate UHT beverages category respectively for the 12-month period ending 1 August 2024

Ingredients

	2024	2023	Actual currency	Constant currency
Revenue £m	2,134	2,157	-1%	+2%
Adjusted operating profit £m	233	214	+9%	+12%
Adjusted operating profit margin	10.9%	9.9%
Operating profit £m	219	201	+9%
Return on average capital employed	16.9%	16.1%

Ingredients sales grew 2% driven by a strong performance in our yeast and bakery ingredients business, AB Mauri. As expected, sales in our portfolio of speciality ingredients businesses, ABFI, were impacted by customer destocking in H1, with performance then improving in H2. Adjusted operating profit increased by 12% led by yeast and bakery ingredients.

Sales in yeast and bakery ingredients grew strongly across most of our regions. This reflects both the annualisation of prior year price increases, predominantly in H1, and good volume growth supported by innovation in bakery ingredients, particularly in H2. We had strong growth in North America, Brazil, Mexico, south Asia and south east Asia. Our business in Argentina was impacted by challenging economic conditions and currency devaluation.

We continue to grow our presence and capabilities in Ingredients through strategic acquisitions. We completed the acquisition of Omega Yeast Labs LLC, a leading provider of liquid yeast to the craft brewing industry in the US, complementing our existing portfolio of speciality yeast products. We also completed the acquisition of Mapo, an Italian manufacturer of premium frozen baked goods, underpinning the growth potential for our Scrocchiarella bakery products, and the acquisition of Romix, a specialist blender of baking ingredients based in the UK.

During the year, our recently built speciality yeast plant in Hull, UK, came online, expanding our capacity and capability in yeast. We also continued with the construction of our new fresh yeast plant in Northern India, where there is considerable market demand for baker's yeast. As part of our multi-year investment programme to improve the way we use water and recycle water at our production facilities, we made good progress with our project in Brazil this year. Following our investment and strategic approach to water stewardship, we have seen a steady year-on-year increase in the proportion of water used that is treated and returned safely to the environment, up from 74% in 2019 to 84% in 2024. We are approaching the theoretical maximum of this water return KPI due to the water which leaves the site in our products or through production process evaporation.

Our ingredients business in Australia and New Zealand, Mauri ANZ, performed well and benefitted from increased production in our new animal feed mill in Hope Valley, Western Australia, after closing an older facility. New Food Coatings, our joint venture ('JV') in Australia, New Zealand and south east Asia, specialising in seasonings, sauces and ingredients, delivered good growth. The JV is investing in a new facility in Bangkok, Thailand, to add capacity.

Sales in our portfolio of speciality ingredients businesses, focused on enzymes, precision extraction, health and nutrition and pharmaceutical delivery systems, were impacted by customer destocking in H1 before delivering a more encouraging performance in H2. In particular, our enzymes and health and nutrition businesses delivered good growth. We delivered an improvement in the adjusted operating margin of our speciality portfolio, benefitting from improved input costs, while significantly increasing investment in R&D and commercial capabilities to support long-term growth.

Investment continued across a number of strategic capital projects in speciality ingredients. This included our yeast extracts business, Ohly, where we are adding capacity in fermentation and spray drying at our site in Hamburg, Germany. At AB Enzymes, we are constructing a new high-care enzyme powder packing line in Rajamäki, Finland.

Sugar

	2024	2023	Actual currency	Constant currency
Revenue £m	2,529	2,474	+2%	+11%
Adjusted operating profit £m	199	179	+11%	+46%
Adjusted operating profit margin	7.9%	7.2%
Operating profit £m	181	119	+52%
Return on average capital employed	10.9%	9.7%

Sugar segment sales and profitability were strongly ahead of the prior year.

Our European sugar businesses in the UK and Spain, which accounted for approximately half of total Sugar sales, grew strongly in 2024 due in large part to higher sugar prices. In the UK in H1, the benefit from higher prices was more than offset by the fact that low stock levels were carried over from the 2022/23 campaign, whereas H2 benefitted from increased production as a result of the return to a more typical sugar beet crop in the 2023/24 campaign. In Spain, sales also benefitted from increased acreage. Beet prices were high in both the UK and Spain for the 2023/24 campaign. As previously announced, sharper than expected falls in UK and European sugar pricing, due to increased supply in the market, negatively impacted sales and profitability in Q4 2024. Consequently, adjusted operating profit for the European sugar businesses for the full year in 2024 was lower than expected.

British Sugar is the largest contributor to ABF Group's Scope 1 and 2 GHG emissions and we have a multi-year decarbonisation programme in place. We made further progress with investment projects this year, including steam and energy reduction at our Wissington and Bury plants. At our Wissington site, the installation of additional evaporators, heat exchangers and other equipment has significantly lowered steam usage, reducing emissions by 30 kt of CO₂e annually and reducing process steam demand by 25%. British Sugar's Scope 1 and 2 GHG emissions are 21% below its 2018 baseline year, albeit in 2024 emissions increased by 19% compared to 2023 due to short-term operational challenges. In January 2024, the Sugar segment's near-term and net zero GHG emissions targets were validated by the SBTi, aligning the business's commitment to global climate goals.

Our overall African sugar business, which accounted for approximately 40% of total Sugar sales, grew well in 2024 on a constant currency basis. Growth in Zambia and South Africa was particularly strong, where we benefitted from both strong cane yields and good factory performances. Malawi was resilient and Eswatini delivered a good performance. Across our African businesses, commercial execution was strong and we made further progress across a range of projects to drive continuous improvement in both our manufacturing and agricultural performance. On an actual currency basis, our African sales declined due to the impact of foreign exchange translation, primarily due to currency devaluations in Zambia and Malawi. We continued to invest in a number of capital projects. The largest is the new sugar mill we are building to expand our capacity in Tanzania, a key growth market, which we expect to complete in 2025. We are also investing in technology infrastructure for our African businesses.

During 2024, we closed our sugar business in the north of China and agreed to the sale of its assets. Our sugar operations in Mozambique were impacted by severe flooding in 2023. In 2024, the operations were mothballed and we recognised an additional impairment charge of £6m.

The operational performance of Vivergo, our bioethanol plant in the UK, strengthened this year and it had a substantially reduced operating loss. However, trading margins achieved during the year continued to be variable as a result of volatility in bioethanol prices. As such, we recognised an asset impairment of £18m in 2024.

As previously announced in our trading update on 5 September 2024, we expect the sharp fall in European sugar prices in Q4 2024 to impact performance in our Sugar segment significantly in 2025, with adjusted operating profit expected to be in the range of £50m to £75m. We expect profitability to recover in 2026 to be more in line with 2024, as a result of lower beet prices that have been contracted and a rebalancing of supply and demand in the market.

Agriculture

	2024	2023	Actual currency	Constant currency
Revenue £m	1,650	1,840	-10%	-9%
Adjusted operating profit £m	41	41	-%	+3%
Adjusted operating profit margin	2.5%	2.2%
Operating profit £m	31	32	-3%
Return on average capital employed	8.0%	8.4%

Agriculture revenue decreased by 9% while adjusted operating profit increased by 3% in 2024.

Our speciality feed and additives businesses performed well. AB Neo, our starter feed business, had good growth in volumes and operating profit. AB Vista, our international feed additives business, grew volumes of both enzyme and non-enzyme additives, albeit continued price competition on certain products impacted sales growth. Premier Nutrition, our specialist premix manufacturing business, had good growth driven by volumes and our nutritional supplements businesses delivered good growth in sales and profit. Our dairy business, which was formed through a number of acquisitions in 2023, performed well as we continued with their integration.

Lower sales in our compound feed businesses reflected reduced commodity prices and continued soft demand in the UK and China. Market conditions in the UK remained challenging due to reduced herd sizes and excess feed production capacity and in China the market was depressed by the economic environment and low farm profitability.

Frontier, our JV that provides grain marketing and crop production services to customers in the UK, was significantly impacted by prolonged wet weather in autumn 2023. This particularly affected the overall performance of Agriculture in 2024.

We continued to invest in long-term growth, with the ongoing build of new premix plants in Vietnam and China.

Financial review

Group performance

Group revenue was £20.1bn, 4% ahead of last year at constant currency, with sales growth in Retail and most of the food businesses. The Group generated an adjusted operating profit of £1,998m, an increase of 32% at actual exchange rates ahead of last year, reflecting a strong margin recovery across the Group as a result of input cost pressures easing. Group adjusted operating profit margin improved from 7.7% last year to 10.0%. Operating profit for the Group of £1,932m was 40% ahead, after charging exceptional items of £35m (2023 - £109m).

For the full year the average rates used to translate the income statement resulted in an adverse translation movement compared to the prior year of £97m, 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 business in Africa.

Free cash flow of £1,355m increased significantly on last year, an increase of £1,086m.

Segmental summary

	Revenue			Adjusted operating profit
At actual rates	2024	2023	Change	2024	2023	Change
At actual rates	£m	£m	%	£m	£m	%
Retail	9,448	9,008	+4.9	1,108	735	+50.7
Grocery	4,242	4,198	+1.0	511	448	+14.1
Ingredients	2,134	2,157	-1.1	233	214	+8.9
Sugar	2,529	2,474	+2.2	199	179	+11.2
Agriculture	1,650	1,840	-10.3	41	41	-
Central	-	-	-	(100)	(94)	-6.4
	20,003	19,677	+1.7	1,992	1,523	+30.8
Business disposed
Sugar	70	73		6	(10)
	20,073	19,750	+1.6	1,998	1,513	+32.1

The segmental analysis by division is set out in the operating reviews. The segmental analysis by geography is set out in note 1 in the notes to the financial statements.

Adjusted earnings per share

	2024	2023	Change
	£m	£m	%
Adjusted operating profit	1,998	1,513	+32.1
Finance income	71	48
Finance expense	(33)	(37)
Lease interest expense	(102)	(91)
Other financial income	23	40
Adjusted profit before taxation	1,957	1,473	+32.9
Taxation on adjusted profit	(453)	(346)
Adjusted profit after tax	1,504	1,127	+33.5
Adjusted earnings attributable to equity shareholders	1,479	1,103	+34.1
Adjusted earnings per share (in pence)	196.9	141.8	+38.9

Interest and other financial income

Finance income increased in the year as a result of higher rates of interest earned on our cash and investments. Finance expense reduced as a result of the repayment of our final $100m Private Placement notes in early April while lease interest expense increased driven in part by our continued store expansion programme in Retail. Other financial income was lower primarily due to foreign exchange losses caused by the devaluation of certain African currencies on non-local currency liabilities.

As a result of the above, on an adjusted basis, profit before tax was up 32.9%, to £1,957m.

Taxation

This year's tax charge on the adjusted profit before tax was £453m, with a reduction in the adjusted effective tax rate to 23.1% from 23.5% last year. The adjusted effective tax rate included the full year impact of the increase in UK corporation tax from 19% to 25% from April 2023 but this was more than offset by the changes to the mix in profits by jurisdiction.

Our current expectation is for the Group's effective tax rate in 2025 to be broadly in line with 2024. This assumes that the limited upward pressure on the rate arising from the introduction of Pillar 2 will be offset by several smaller movements.

Adjusted earnings per share increased by 38.9% to a record 196.9p per share. This increase reflects the higher adjusted profit as well as as a benefit from the reduction in the weighted average number of shares, from 778 million for 2023 to 751 million for 2024, as a result of share buyback programmes executed in the year.

Basic earnings per share

	2024	2023	Change
	£m	£m	%
Adjusted profit before tax	1,957	1,473	+32.9
Acquired inventory fair value adjustments	(2)	(3)
Amortisation of non-intangibles	(40)	(41)
Exceptional items	(35)	(109)
Profits less losses on sale and closure of businesses	26	(3)
Profits less losses on disposal of non-current assets	16	28
Transaction costs	(5)	(5)
Profit before tax	1,917	1,340	+43.1
Taxation	(437)	(272)
Profit after tax	1,480	1,068	+38.6
Earnings attributable equity to shareholders	1,455	1,044	+39.4
Basic earnings per share (in pence)	193.7p	134.2p	+44.3

Exceptional items

	2024	2023
	£m	£m
Grocery - impairment	-	41
Sugar - impairments	24	50
Retail - impairments, right-sizing and fair value write-downs	11	18
	35	109

The income statement this year included a non-cash exceptional impairment charge of £35m.

In the Sugar segment, Vivergo recognised a £18m impairment write-down against assets driven by the volatility of bio-ethanol prices impacting trading margins. Due to the severe flooding in Mozambique last year, the related damage to the sugar crop fields and the inability to plant for the foreseeable future, our sugar business in Mozambique recognised a further £6m impairment write-down against assets.

In the Retail segment, the Group recognised £11m of exceptional impairment charges relating to the German stores impaired in 2022, after additional right-of-use assets were recognised due to rent indexation adjustments in the current financial year.

The prior year exceptional impairment charge of £109m comprised non-cash write-downs of assets specifically £41m for the Don businesses in the Grocery segment, £50m for the Sugar segment including £15m for China North Sugar and £35m for Mozambique and £18m for the Retail segment relating to rent indexation in the German Primark store portfolio.

Profit less losses on sale and closure of businesses of £26m predominantly includes the profit on our sale of our China North Sugar business. Profit less losses on disposal of non-current assets of £16m includes profit on sale of our non-operating investment property portfolio in our Central division for properties in the UK and Australia. The prior year profit of £28m also relates to the sale of other non-operating investment properties in Central mostly in Australia and also included a large property sale in the UK for our Grocery Segment.

Profit before tax of £1,917m was 43.1% ahead of last year, benefitting from the lower level of exceptional items in 2024.

Total tax charge for the year of £437m benefitted from a credit of £16m (2023 - £74m) for tax relief on the amortisation of non-operating intangible assets, the amortisation of acquired inventory fair value adjustments, the profits on disposal of non-current assets, the profits on disposal of businesses and on the exceptional items.

Earnings attributable to equity shareholders were £1,455m and basic earnings per share were 193.7p, 44% ahead of last year, also benefitting from the lower level of shares.

Cash flow

	2024	2023
	£m	£m
Adjusted EBITDA	2,910	2,361
Repayment of lease liabilities net of incentives received	(308)	(246)
Working capital	305	(216)
Capital expenditure	(1,184)	(1,073)
Purchase of subsidiaries, joint ventures and associates	(93)	(94)
Sale of subsidiaries, joint ventures and associates	24	4
Net interest paid	(69)	(74)
Taxation	(340)	(341)
Share of adjusted profit after tax from joint ventures and associates	(120)	(127)
Dividends received from joint ventures and associates	105	107
Other	125	(32)
Free cash flow	1,355	269
Share buyback	(562)	(448)
Dividends	(502)	(345)
Movement in loans and current asset investments	(318)	(10)
Cash flow	(27)	(534)

There was a record free cash inflow in the year totalling £1,355m as a result of a combination of record operating profit generated by the Group, and the normalisation of working capital.

Working capital inflows during the current financial year were driven by a number of factors including the normalisation of inventory at Primark as expected, stock reductions in most of our food businesses, reducing inflation overall and various other working capital initiatives.

The capital expenditure increase this year continues from the step up in investment last year following low levels in the prior years. This is driven by the continuation of a number of large capital projects. The increase of the investment in our food businesses primarily relates to projects to build capacity. In Primark the increase reflects the acceleration of our new store programme and expenditure to expand our capabilities in warehouse automation and technology. We expect this higher level of investment to continue in the medium term.

The spend on acquisitions this financial year was £93m. The most significant of these were the acquisition of The Artisanal Group ('TAG') in Australia in our Grocery segment, acquisitions in our Ingredients segment of Mapo, Romix and Omega Yeast and the acquisition of our remaining holding of the Roal business in which we previously had a 50% stake.

We disposed of our China North Sugar business.

Cash tax was broadly similar to last year, notwithstanding the significant increase in profit, because of the reallocation of historic overpayments arising from favourable settlements of historical enquiries and returns. We expect this impact to continue in 2025 and overall are expecting a slightly reduced level of cash tax due to the anticipated receipt of the state aid refund.

In Other cash flow, we have seen the benefit of the UK pension fund abatement of £64m (£38m for the defined contribution scheme and £26m for the defined benefit scheme) and an increase in non-cash provisions predominantly as a result of the onerous contract provisions recognised in our Sugar segment.

Below free cash flow, there was cash outflow of £562m from our share buyback programmes, £56m related to the first £500m share buyback early in the financial year, the completion of the second £500m share buyback programme. We also paid £502m for total dividends in this financial year, which reflects the 2023 final and special dividend and interim 2024 dividend. Cash deposits placed with a greater than 90-day term resulted in an increase in current asset investments in the year.

Financing and liquidity

	2024	2023
	£m	£m
Short-term loans	(71)	(99)
Long-term loans	(454)	(394)
Lease liabilities	(3,065)	(3,160)
Total debt	(3,590)	(3,653)
Cash, cash equivalents and overdrafts	1,235	1,388
Current Asset Investments	334	-
Total net debt	(2,021)	(2,265)
Leverage ratio	0.7x	1.0x

Total short and long term loans of £525m at the year end increased by £32m compared to £493m last year, with our final $100m (£81m) Private Placement notes being repaid in April 2024. This was offset by increased borrowing in our Sugar businesses in Africa, to primarily fund expansion in Tanzania.

Cash, cash equivalents and current asset investments of £1,569m increased by £181m compared to last year, reflecting our positive cash flow. £334m of this is classified as current asset investments, with cash deposits with maturities between three and six months placed to diversify our cash investments and lock in favourable interest rates. Net cash before lease liabilities of £1,044m increased by £149m year-on-year.

Total Liquidity of £2.9bn was £0.2bn higher than last year. Total Liquidity comprises cash, cash equivalents and current asset investments of £1.7bn less non-qualifying borrowings of £0.2bn and inaccessible cash of £0.1bn, plus the £1.5bn committed revolving credit facility ('RCF'), which is free of financial performance covenants. The RCF was extended in the year, taking the final maturity to June 2029.

Lease liabilities reduced by £95m year-on-year as a result of the capital repayment element of the leases and favourable exchange rate movements more than offsetting the impact of new space and lease renewals.

Total net debt reduced by £244m in 2024 to £2,021m at the year end. A combination of higher Adjusted EBITDA and lower Total net debt resulted in a lower Leverage ratio of 0.7x at the year end, compared to 1.0x in 2023.

Pensions

The Group's defined benefit pension schemes aggregate surplus increased by 4% to £1,432m at year end compared to last year's £1,377m. The UK scheme, which accounts for around 90% of the Group's gross pension assets was in surplus by £1,454m (2023 - £1,397m). The most recent triennial actuarial valuation of the UK scheme was carried out as of 5 April 2023. This last valuation showed a funding surplus of £1,013m. Details of the assumptions made in the current and previous year are disclosed in note 13 of the financial statements together with the bases on which those assumptions have been made.

The charge for the year for the Group's defined contribution schemes amounted to £103m (2023 - £95m). This compared with the cash contribution to the defined benefit schemes of £9m (2023 - £36m), the decrease driven by the benefit of the abatement on the UK pension fund.

As agreed with the trustees last year and reconfirmed this year, as a result of this significant increase in the surplus in the UK scheme, the Group will continue to receive a cash flow benefit per year from the abatement of UK employer pension contributions on both the defined benefit and defined contribution schemes, the latter approximately £35m.

Dividend and shareholder returns

Our capital allocation policy is for the Group's financial leverage, expressed as the ratio of Total net debt to Adjusted EBITDA, to be well under 1.5 times whilst financial leverage consistently below 1.0 times may indicate a surplus capital position. Surplus capital may be returned to shareholders by special dividends or share buybacks, subject to the Board's discretion.

In November 2023 we announced our second share buyback programme of £500m, which was completed in August 2024.

At the end of the financial year we had 744 million ordinary shares in issue. The weighted average number of shares for the year was 751 million, which compared to 778 million for the prior financial year. This year's share buyback has had a positive impact on our reported adjusted earnings per share of 6.7p, calculated on a simplified basis.

At the end of the financial year 2024, our financial leverage ratio was 0.7x. In September 2024, we extended the buyback programme by £100m. This has now been completed. The Group continues to prioritise investment in its businesses. Nevertheless, given the outlook for the Group, the strength of the balance sheet and the underlying cash generation of the business, the Board has decided to continue to return additional capital to shareholders. Therefore, the Group will continue with a buyback programme, targeting an additional amount of £500m over the next 12 months.

In addition, the Group is declaring a special dividend of 27.0p per share. The Board is proposing a final dividend of 42.3p per share, which together with the special dividend will be paid on 10 January 2025 to shareholders on the register on 13 December 2024. Taken with the interim dividend of 20.7p per share, the total dividend equates to 90.0p per share, an increase of 50% on the total dividend of 60.0p in the financial year 2023.

Principal risks and uncertainties

Our principal risks and uncertainties

The directors have carried out an assessment of the principal risks facing ABF, including emerging risks, that would threaten our business model, future performance, solvency or liquidity. Outlined below are the Group's principal risks and uncertainties. These have been detailed in the 2024 Annual Report and Accounts together with the key mitigating activities in place to address them.

Complexity of operating across global markets

Fluctuations in commodity and energy prices

Movement in exchange rates

Health and nutrition

Workplace health and safety

Product safety and quality

Breaches of IT and information security

Our supply chain and ethical business practices

Our use of natural resources and managing our environmental impact

The impact of climate change and natural disasters on our operations

Going concern

After making enquiries, the Board has a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the consolidated financial statements.

The forecast for the going concern assessment period to 28 February 2026 has been updated for the business's latest trading in October and is the best estimate of cash flow in the period.

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 total net debt including lease liabilities to adjusted EBITDA to be well under 1.5x. At the end of this financial year, the financial leverage ratio was 0.7x. At the end of the financial year, the Group had total cash, cash equivalents and current asset investments of £1.7bn and an undrawn committed Revolving Credit Facility of £1.5bn. The Revolving Credit Facility is free of performance covenants and matures in 2029, after a further one year extension was made in April 2024. The $100m of outstanding private placement notes were repaid on 2 April 2024, after which point Group funding is not subject to financial performance covenants.

In reviewing the cash flow forecast for the period, the directors reviewed the trading for both Primark and the food businesses in light of the experience gained from events of the last three years of trading and emerging trading patterns. The directors have a thorough understanding of the risks, sensitivities and judgements included in these elements of the cash flow forecast and have a high degree of confidence in these cash flows.

As a downside scenario, the directors considered the adverse scenario in which inflationary costs are not fully recovered, high levels of volatility in key commodities prices without price adjustments, 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 17% 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 period, management could take substantial mitigating actions, such as reviewing pricing, taking 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.

Directors' responsibilities in respect of the financial statements

We confirm that to the best of our knowledge:

• the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

• the Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

We consider the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

The contents of this announcement, including the responsibility statement above, have been extracted from the annual report and accounts for the 52 weeks ended 14 September 2024 which may be found at www.abf.co.uk and will be despatched to shareholders shortly. Accordingly this responsibility statement makes reference to the financial statements of the Company and the Group and to the relevant narrative appearing in that annual report and accounts rather than the contents of this announcement.

On behalf of the Board

Michael McLintock	George Weston	Eoin Tonge
Chairman	Chief Executive	Finance Director

5 November 2024

Consolidated income statement

for the 52 weeks ended 14 September 2024

		2024	2023
Continuing operations	Note	£m	£m
Revenue	1	20,073	19,750
Operating costs before exceptional items		(18,239)	(18,410)
Exceptional items	2	(35)	(109)
		1,799	1,231
Share of profit after tax from joint ventures and associates		117	124
Profits less losses on disposal of non-current assets		16	28
Operating profit		1,932	1,383

Adjusted operating profit	1	1,998	1,513
Profits less losses on disposal of non-current assets		16	28
Amortisation of non-operating intangibles		(40)	(41)
Acquired inventory fair value adjustments		(2)	(3)
Transaction costs		(5)	(5)
Exceptional items	2	(35)	(109)

Profits less losses on sale and closure of businesses	7	26	(3)
Profit before interest		1,958	1,380
Finance income		71	48
Finance expense	3	(135)	(128)
Other financial income		23	40
Profit before taxation		1,917	1,340

Adjusted profit before taxation		1,957	1,473
Profits less losses on disposal of non-current assets		16	28
Amortisation of non-operating intangibles		(40)	(41)
Acquired inventory fair value adjustments		(2)	(3)
Transaction costs		(5)	(5)
Exceptional items	2	(35)	(109)
Profits less losses on sale and closure of businesses	7	26	(3)
Taxation - UK (excluding tax on exceptional items)		(108)	(40)
- UK (on exceptional items)		5	-
- Overseas (excluding tax on exceptional items)		(335)	(300)
- Overseas (on exceptional items)		1	68
	4	(437)	(272)
Profit for the period		1,480	1,068

Attributable to
Equity shareholders		1,455	1,044
Non-controlling interests		25	24
Profit for the period		1,480	1,068

Basic and diluted earnings per ordinary share (pence)	6	193.7	134.2
Dividends per share paid and proposed for the period (pence)	5	63.0	47.3
Special dividend per share proposed for the period (pence)	5	27.0	12.7

Consolidated statement of comprehensive income

for the 52 weeks ended 14 September 2024

	2024	2023
	£m	£m
Profit for the period recognised in the income statement	1,480	1,068

Other comprehensive income
Remeasurements of defined benefit schemes	38	(7)
Deferred tax associated with defined benefit schemes	(10)	4
Items that will not be reclassified to profit or loss	28	(3)

Effect of movements in foreign exchange	(349)	(470)
Net gain on hedge of net investment in foreign subsidiaries	-	1
Net loss on other investments held at fair value through other comprehensive income	(5)	-
Deferred tax associated with movements in foreign exchange	-	(5)
Current tax associated with movements in foreign exchange	(2)	6
Movement in cash flow hedging position	(51)	(260)
Deferred tax associated with movement in cash flow hedging position	13	40
Deferred tax associated with movement in other investments	1	-
Share of other comprehensive loss of joint ventures and associates	(10)	(18)
Effect of hyperinflationary economies	59	40
Items that are or may be subsequently reclassified to profit or loss	(344)	(666)

Other comprehensive loss for the period	(316)	(669)

Total comprehensive income for the period	1,164	399

Attributable to
Equity shareholders	1,159	397
Non-controlling interests	5	2
Total comprehensive income for the period	1,164	399

Consolidated balance sheet

at 14 September 2024

	2024	2023
	£m	£m
Non-current assets
Intangible assets	1,896	1,870
Property, plant and equipment	6,098	5,674
Investment properties	105	107
Right-of-use assets	2,255	2,335
Investments in joint ventures	286	303
Investments in associates	95	91
Employee benefits assets	1,506	1,446
Income tax	-	23
Deferred tax assets	223	193
Other receivables	30	63
Total non-current assets	12,494	12,105
Current assets
Inventories	2,942	3,207
Biological assets	94	99
Trade and other receivables	1,697	1,778
Derivative assets	28	96
Current asset investments	334	-
Income tax	102	102
Cash and cash equivalents	1,323	1,457
Total current assets	6,520	6,739
Total assets	19,014	18,844
Current liabilities
Lease liabilities	(267)	(335)
Loans and overdrafts	(159)	(168)
Trade and other payables	(2,934)	(2,953)
Derivative liabilities	(97)	(69)
Income tax	(133)	(109)
Provisions	(78)	(55)
Total current liabilities	(3,668)	(3,689)
Non-current liabilities
Lease liabilities	(2,798)	(2,825)
Loans	(454)	(394)
Provisions	(60)	(48)
Deferred tax liabilities	(682)	(626)
Employee benefits liabilities	(74)	(69)
Total non-current liabilities	(4,068)	(3,962)
Total liabilities	(7,736)	(7,651)
Net assets	11,278	11,193
Equity
Issued capital	42	44
Other reserves	177	179
Translation reserve	(383)	(42)
Hedging reserve	(45)	2
Retained earnings	11,395	10,910
Total equity attributable to equity shareholders	11,186	11,093
Non-controlling interests	92	100
Total equity	11,278	11,193

Consolidated cash flow statement

for the 52 weeks ended 14 September 2024

	2024	2023
	£m	£m
Cash flow from operating activities
Profit before taxation	1,917	1,340
Profits less losses on disposal of non-current assets	(16)	(28)
Profits less losses on sale and closure of businesses	(26)	3
Transaction costs	5	5
Finance income	(71)	(48)
Finance expense	135	128
Other financial income	(23)	(40)
Share of profit after tax from joint ventures and associates	(117)	(124)
Amortisation	100	82
Depreciation (including of right-of-use assets)	849	804
Exceptional items	35	109
Acquired inventory fair value adjustments	2	3
Effect of hyperinflationary economies	21	14
Net change in the fair value of current biological assets	(22)	(11)
Share-based payment expense	31	18
Pension costs less contributions	58	(8)
Decrease/(increase) in inventories	169	(94)
Decrease/(increase) in receivables	23	(107)
Increase/(decrease) in payables	113	(15)
Purchases less sales of current biological assets	1	(9)
Increase/(decrease) in provisions	30	(27)
Cash generated from operations	3,214	1,995
Income taxes paid	(340)	(341)
Net cash generated from operating activities	2,874	1,654
Cash flow from investing activities
Dividends received from joint ventures and associates	105	107
Purchase of property, plant and equipment	(1,124)	(997)
Purchase of intangibles	(60)	(76)
Lease incentives received	40	62
Sale of property, plant and equipment	43	48
(Increase)/decrease in current asset investments	(334)	3
Purchase of subsidiaries, joint ventures and associates	(93)	(94)
Sale of subsidiaries, joint ventures and associates	24	4
Purchase of other investments	(4)	(4)
Interest received	71	44
Net cash used in investing activities	(1,332)	(903)
Cash flow from financing activities
Dividends paid to non-controlling interests	(13)	(7)
Dividends paid to equity shareholders	(502)	(345)
Interest paid	(140)	(118)
Repayment of lease liabilities	(348)	(308)
Decrease in short-term loans	(50)	(13)
Increase in long-term loans	66	-
Share buyback	(562)	(448)
Movement from changes in own shares held	(20)	(46)
Net cash used in financing activities	(1,569)	(1,285)
Net decrease in cash and cash equivalents	(27)	(534)
Cash and cash equivalents at the beginning of the period	1,388	1,995
Effect of movements in foreign exchange	(126)	(73)
Cash and cash equivalents at the end of the period	1,235	1,388

Consolidated statement of changes in equity

for the 52 weeks ended 14 September 2024

		Attributable to equity shareholders
		Issued capital	Other reserves	Translation reserve	Hedging reserve	Retained earnings	Total	Non- controlling interests	Total equity
	Note	£m	£m	£m	£m	£m	£m	£m	£m
Balance as at 17 September 2022		45	178	422	154	10,649	11,448	106	11,554
Total comprehensive income
Profit for the period recognised in the income statement		-	-	-	-	1,044	1,044	24	1,068
Remeasurements of defined benefit schemes		-	-	-	-	(7)	(7)	-	(7)
Deferred tax associated with defined benefit schemes		-	-	-	-	4	4	-	4
Items that will not be reclassified to profit or loss		-	-	-	-	(3)	(3)	-	(3)
Effect of movements in foreign exchange		-	-	(448)	-	-	(448)	(22)	(470)
Net gain on hedge of net investment in foreign subsidiaries		-	-	1	-	-	1	-	1
Deferred tax associated with movements in foreign exchange		-	-	(5)	-	-	(5)	-	(5)
Current tax associated with movements in foreign exchange		-	-	6	-	-	6	-	6
Movement in cash flow hedging position		-	-	-	(260)	-	(260)	-	(260)
Deferred tax associated with movement in cash flow hedging position		-	-	-	40	-	40	-	40
Share of other comprehensive income of joint ventures and associates		-	-	(18)	-	-	(18)	-	(18)
Effect of hyperinflationary economies		-	-	-	-	40	40	-	40
Items that are or may be subsequently reclassified to profit or loss		-	-	(464)	(220)	40	(644)	(22)	(666)
Other comprehensive income		-	-	(464)	(220)	37	(647)	(22)	(669)
Total comprehensive income		-	-	(464)	(220)	1,081	397	2	399
Inventory cash flow hedge movements
Amounts transferred to cost of inventory		-	-	-	68	-	68	-	68
Total inventory cash flow hedge movements		-	-	-	68	-	68	-	68
Transactions with owners
Dividends paid to equity shareholders	5	-	-	-	-	(345)	(345)	-	(345)
Net movement in own shares held		-	-	-	-	(28)	(28)	-	(28)
Share buyback		(1)	1	-	-	(448)	(448)	-	(448)
Deferred tax associated with share-based payments		-	-	-	-	1	1	-	1
Dividends paid to non-controlling interests		-	-	-	-	-	-	(8)	(8)
Total transactions with owners		(1)	1	-	-	(820)	(820)	(8)	(828)
Balance as at 16 September 2023		44	179	(42)	2	10,910	11,093	100	11,193

		Attributable to equity shareholders
	Note	Issued capital	Other reserves	Translation reserve	Hedging reserve	Retained earnings	Total	Non- controlling interests	Total equity
		£m	£m	£m	£m	£m	£m	£m	£m
Balance as at 16 September 2023		44	179	(42)	2	10,910	11,093	100	11,193
Total comprehensive income
Profit for period recognised in income statement		-	-	-	-	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 associated with movements in foreign exchange		-	-	(2)	-	-	(2)	-	(2)
Movement in cash flow hedging position		-	-	-	(51)	-	(51)	-	(51)
Deferred tax associated with movement in cash flow hedging position		-	-	-	13	-	13	-	13
Deferred tax associated with movement in other investments		-	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	5	-	-	-	-	(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, 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
	2024	2023	2024	2023
	£m	£m	£m	£m
Operating segments
Retail	9,448	9,008	1,108	735
Grocery	4,242	4,198	511	448
Ingredients	2,134	2,157	233	214
Sugar	2,529	2,474	199	179
Agriculture	1,650	1,840	41	41
Central	-	-	(100)	(94)
	20,003	19,677	1,992	1,523
Business disposed
Sugar	70	73	6	(10)
	20,073	19,750	1,998	1,513
Geographical information
United Kingdom	7,297	7,271	708	488
Europe & Africa	7,830	7,552	754	559
The Americas	2,513	2,420	406	353
Asia Pacific	2,363	2,434	124	123
	20,003	19,677	1,992	1,523
Business disposed
Asia Pacific	70	73	6	(10)
	20,073	19,750	1,998	1,513

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 continuing businesses	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)

2023

	Retail	Grocery	Ingredients	Sugar	Agriculture	Central	Total
	£m	£m	£m	£m	£m	£m	£m
Revenue from continuing businesses	9,008	4,222	2,366	2,591	1,849	(359)	19,677
Internal revenue	-	(24)	(209)	(117)	(9)	359	-
External revenue from external customers	9,008	4,198	2,157	2,474	1,840	-	19,677
Business disposed	-	-	-	73	-	-	73
Revenue from external customers	9,008	4,198	2,157	2,547	1,840	-	19,750

Operating profit	717	402	201	119	32	(88)	1,383

Adjusted operating profit before joint ventures and associates	735	368	190	172	25	(94)	1,396
Share of adjusted profit after tax from joint ventures and associates	-	80	24	7	16	-	127
Business disposed	-	-	-	(10)	-	-	(10)
Adjusted operating profit	735	448	214	169	41	(94)	1,513
Finance income						48	48
Finance expense	(86)	(1)	(1)	(3)	-	(37)	(128)
Other financial income						40	40
Adjusted profit before taxation	649	447	213	166	41	(43)	1,473
Profits less losses on disposal of non-current assets	-	19	-	-	-	9	28
Amortisation of non-operating intangibles	-	(23)	(13)	-	(5)	-	(41)
Acquired inventory fair value adjustments	-	(1)	-	-	(2)	-	(3)
Transaction costs	-	-	-	-	(2)	(3)	(5)
Exceptional items	(18)	(41)	-	(50)	-	-	(109)
Profits less losses on sale and closure of businesses	-	-	3	(6)	-	-	(3)
Profit before taxation	631	40	203	110	32	(37)	1,340
Taxation	-	-	-	-	-	(272)	(272)
Profit for the period	631	401	203	110	32	(309)	1,068

Segment assets (excluding joint ventures and associates)	7,530	2,759	2,011	2,179	640	110	15,229
Investments in joint ventures and associates	-	58	133	48	155	-	394
Segment assets	7,530	2,817	2,144	2,227	795	110	15,623
Cash and cash equivalents						1,457	1,457
Income tax						125	125
Deferred tax assets						193	193
Employee benefits assets						1,446	1,446
Segment liabilities	(4,326)	(689)	(407)	(501)	(196)	(166)	(6,285)
Loans and overdrafts						(562)	(562)
Income tax						(109)	(109)
Deferred tax liabilities						(626)	(626)
Employee benefits liabilities						(69)	(69)
Net assets	3,204	2,128	1,737	1,726	599	1,799	11,193

Non-current asset additions	711	154	174	289	20	4	1,352
Depreciation and non-cash lease adjustments	(526)	(114)	(62)	(75)	(19)	(8)	(804)
Amortisation	(31)	(26)	(15)	(3)	(7)	-	(82)

Operating segments - geographical information

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)

2023

	United Kingdom	Europe & Africa	The Americas	Asia Pacific	Total
	£m	£m	£m	£m	£m
Revenue from external customers	7,271	7,552	2,420	2,507	19,750
Segment assets	5,690	6,651	1,792	1,490	15,623
Non-current asset additions	305	732	217	98	1,352
Depreciation (including of right-of-use assets)	(279)	(374)	(84)	(67)	(804)
Amortisation	(17)	(56)	(4)	(5)	(82)
Acquired inventory fair value adjustments	(2)	(1)	-	-	(3)
Transaction costs	(4)	(1)	-	-	(5)
Exceptional items	-	(53)	-	(56)	(109)

The Group's operations in the following countries met the criteria for separate disclosure:

	Revenue		Non-current assets
	2024	2023	2024	2023
	£m	£m	£m	£m
Australia	1,409	1,407	656	541
Spain	1,972	1,836	713	651
United States	1,690	1,580	950	887

2. Exceptional items

2024

The income statement this year included a non-cash exceptional impairment charge of £35m.

In the Sugar segment, Vivergo recognised a £17m impairment write-down against property, plant and equipment and £1m against right-of-use assets driven by the volatility of ethanol prices impacting trading margins. Due to the severe flooding in Mozambique last year, the related damage to the sugar crop fields and the inability to plant for the foreseeable future, our sugar business in Mozambique recognised a further £3m impairment write-down against property, plant and equipment and £3m against working capital.

In the Retail segment, the Group recognised £11m of exceptional impairment charges still relating to the German stores impaired in 2022, after additional right-of-use assets were recognised due to rent indexation adjustments in the current financial year.

2023

The prior year exceptional impairment charge of £109m comprised non-cash write-downs of assets predominantly against property, plant and equipment and right-of-use assets specifically £41m for the Don businesses in the Grocery segment, £50m for the Sugar segment including £15m for China North Sugar and £35m for Maragra, our sugar business in Mozambique, and £18m for the Retail segment relating to the German Primark store portfolio.

3. Finance expense
	2024	2023
	£m	£m
Bank loans and overdrafts	(19)	(23)
All other borrowings	(12)	(11)
Lease liabilities	(102)	(91)
Other payables	(2)	(3)
	(135)	(128)
4. Income tax expense
	2024	2023
	£m	£m
Current tax expense
UK - corporation tax at 25% (2023 - 21.8%)	51	26
Overseas - corporation tax	337	249
UK - under/(over) provided in prior years	4	(14)
Overseas - under provided in prior years	10	18
	402	279
Deferred tax expense
UK - deferred tax	61	54
Overseas - deferred tax	(16)	28
UK - over provided in prior years	(13)	(26)
Overseas - under/(over) provided in prior years	3	(63)
	35	(7)
Total income tax expense in the income statement	437	272

Reconciliation of effective tax rate
Profit before taxation	1,917	1,340
Less share of profit after taxation from joint ventures and associates	(117)	(124)
Profit before taxation excluding share of profit after taxation from joint ventures and associates	1,800	1,216


Nominal tax charge at UK corporation tax rate of 25% (2023 - 21.8%)	450	265
Effect of higher and lower tax rates on overseas earnings	(92)	(16)
Effect of changes in tax rates on the income statement	7	5
Expenses not deductible for tax purposes	101	66
Disposal of assets covered by tax exemptions or unrecognised capital losses	(9)	(2)
Deferred tax not recognised	(24)	39
Adjustments in respect of prior years	4	(85)
	437	272

Other comprehensive income or equity
Deferred tax associated with defined benefit schemes	10	(4)
Deferred tax associated with share-based payments	-	(1)
Current tax associated with share-based payments	(2)	-
Deferred tax associated with movements in cash flow hedging position	(13)	(40)
Deferred tax associated with movements in foreign exchange	-	5
Current tax associated with movements in foreign exchange	2	(6)
Deferred tax in reserves on other investment reserves	(1)	-
	(4)	(46)

The UK corporation tax rate of 19% increased to 25% from 1 April 2023.

The EU state aid case relating to the Group Financing Exemption in the UK's controlled foreign company legislation concluded on 19 September 2024 with no further appeals being permitted. The Court of Justice of the European Union ('CJEU') found in favour of the UK Government and the UK companies appealing the case. Therefore, there is no longer a potential liability (2023 - £26m) for the Group relating to the case. In prior years the Group considered a provision was not required and therefore there is no impact on the tax charge in the year. Payments were made to HM Revenue & Customs ('HMRC') in 2021 following the receipt of charging notices. These payments, totalling £22.9m, will now be refunded to the Group by HMRC.

In the prior year an exceptional prior year tax credit of £58m was recognised in relation to deferred tax asset recognition in Germany.

Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which the Group operates, including the UK. The legislation will be effective for the Group's 2025 financial year. The Group has performed an assessment of the Group's potential exposure to Pillar Two income taxes. This assessment is based on data available from the Group's 2023 consolidated financial statements and the 2023 financial year Country-by Country Report. Based on the assessment, the Pillar Two effective tax rates in most of the jurisdictions in which the Group operates are above 15%. However, there are a limited number of jurisdictions where the transitional safe harbour relief does not apply. Of these jurisdictions, the most noteworthy is Ireland, where the statutory tax rate is 12.5% and where there will be a local top up tax to 15%. Based on a high-level assessment, the impact in 2023 of Pillar 2 on the ABF adjusted effective tax rate would have been less than 1%. The Pillar 2 legislation is complex and still evolving. We will continue to monitor the impact of future developments.

We recognise 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. Our tax strategy, approved by the Board, is based on seven tax principles that are embedded in the financial and non financial processes and controls of the Group. This tax strategy is available in the Policies section of the Group's website.

5. Dividends
	2024	2023	2024	2023
	pence per share	pence per share	£m	£m
2022 final	-	29.9	-	235
2023 interim	-	14.2	-	110
2023 final and special	45.8	-	348	-
2024 interim	20.7	-	154	-
	66.5	44.1	502	345

The 2024 interim dividend was declared on 23 April 2024 and paid on 5 July 2024. Given the outlook for the Group, the strength of the balance sheet and the underlying cash generation of the business, we have declared the payment of a special dividend, to be paid as a second interim dividend at £27.0p per share at an estimated cost of £199m.

The Board has proposed a final dividend of £42.3p per share at an estimated cost of £312m. The combined 2024 final and special dividend of 69.3p, with an estimated value of £511m, will be paid on 10 January 2025 to shareholders on the register on 13 December 2024.

Dividends relating to the period including the special dividend were 90.0p per share totalling £666m (2023 - 60.0p per share totalling £459m).

6. Earnings per share

The calculation of basic earnings per share at 14 September 2024 was based on the net profit attributable to equity shareholders of £1,455m (2023 - £1,044m), and a weighted average number of shares outstanding during the year of 751 million (2023 - 778 million).

The calculation of the weighted average number of shares excludes the shares held by the Employee Share Ownership Plan Trust on which the dividends are being waived. The weighted average number of shares has reduced as a result of our first and second share buyback programmes. In the year, we repurchased 23.6 million shares which were cancelled.

Adjusted earnings per ordinary share, which exclude the impact of profits less losses on disposal of non-current assets and the sale and closure of businesses, amortisation of acquired inventory fair value adjustments, transaction costs, amortisation of non-operating intangibles, exceptional items and any associated tax credits, is shown to provide clarity on the underlying performance of the Group.

Amortisation of non-operating intangibles of £40m (2023 - £41m) shown as adjusting items in the income statement, include £3m (2023 - £3m) incurred by joint ventures.

The diluted earnings per share calculation takes into account the dilutive effect of share incentives. The diluted, weighted average number of shares is 751 million (2023 - 778 million). There is no material difference between basic and diluted earnings.

	2024	2023
	pence per share	pence per share
Adjusted earnings per share	196.9	141.8
Disposal of non-current assets	2.1	3.6
Sale and closure of businesses	3.5	(0.4)
Acquired inventory fair value adjustments	(0.3)	(0.4)
Transaction costs	(0.6)	(0.6)
Exceptional items	(4.6)	(14.0)
Tax effect on above adjustments and exceptional tax	0.8	8.2
Amortisation of non-operating intangibles	(5.4)	(5.3)
Tax credit on non-operating intangibles amortisation	1.3	1.3
Earnings per ordinary share	193.7	134.2

7. Acquisitions and disposals

Acquisitions

2024

In the first half, the Grocery division acquired Capsicana, a provider of Latin American products including tortillas, pastes, kits and seasoning mixes. Also in the first half, the Ingredients division acquired the remaining 50% stake of its existing joint venture Roal, making it a wholly owned subsidiary. The acquisition gave rise to negative goodwill of £7m which was released to the income statement through profit on disposal of business.

In the second half, the Ingredients division acquired Mapo, an Italian manufacturer of premium frozen baked goods, to support AB Mauri's Scrocchiarella product range, Omega Yeast Labs, a leading provider of liquid yeast to the craft brewing industry in the US, for £36m, and Romix, a specialist blender of baking ingredients in the UK.

Also in the second half, the Grocery division acquired The Artisanal Group, a leading manufacturer and wholesaler of high-quality baked goods in Australia, for £35m.

	Pre-acquisition carrying values	Recognised values on acquisition
	Pre-acquisition carrying values	TAG (The Artisanal Group)	Omega Yeast	Other	Total
	£m	£m	£m	£m	£m
Net assets
Intangible assets	1	15	8	14	37
Property, plant and equipment and right-of-use assets	73	8	11	63	82
Working capital	6	(1)	-	9	8
Cash	7	2	1	4	7
Loans	(25)	(25)	-	-	(25)
Capital payable	(39)	-	-	(39)	(39)
Lease liabilities	-	-	(8)	-	(8)
Provisions	-	-	-	(1)	(1)
Taxation	(4)	(5)	-	(1)	(6)
Net identifiable assets and liabilities	19	(6)	12	49	55
Goodwill		41	24	12	77
Negative goodwill released to the income statement		-	-	(7)	(7)
Total consideration		35	36	54	125

	Recognised values on acquisition
	£m
Satisfied by
Cash consideration	96
Consideration already paid	5
Net assets already owned	15
Deferred consideration	9
	125

Net cash
Cash consideration	96
Cash and cash equivalents acquired	(7)
	89

Pre-acquisition carrying amounts were the same as recognised values on acquisition apart from £36m of non-operating intangibles in respect of brands, technology and customer relationships, and £9m of property, plant and equipment, together with a £(2)m related deferred tax liability, an inventory uplift of £2m, lease liabilities of £(8)m, £(1)m of provisions and goodwill of £77m. Cash flow on acquisition of subsidiaries, joint ventures and associates of £93m comprised £89m cash consideration and £4m deferred consideration paid in respect of previous acquisitions.

2023

In the first half, the Agriculture division acquired Kite Consulting, Advance Sourcing and Progres. Kite Consulting is a specialist dairy consultant and Advance Sourcing provides specialist products to create value by improving herd performance and supports dairy farmers to improve herd efficiency and resilience. Progres in Finland uses a patented additive to support gut health.

Also in the first half, the Ingredients division acquired Vital Solutions in Germany, which specialises in natural science-based ingredients for application in dietary supplements and functional foods.

In the second half, the Agriculture division acquired IFCN, a dairy research and consulting company and National Milk Records plc (NMR) for £48m. NMR is the leading agri-tech supplier of management information and testing services to the UK dairy supply chain.

Disposals

2024

The Sugar division sold its remaining assets in north China for £24m net of restructuring costs. Profit on sale was £12m compared to assets of £12m. The Sugar division also disposed of a 30% associate interest in South Africa which enabled the release of a £5m non-cash provision taken in the prior year and charged £2m for the closure of a small joint venture in South Africa. On completion of the buyout of the Roal joint venture in Finland, the Ingredients division released £7m negative goodwill arising. The Ingredients division also released £4m of surplus provisions relating to closed factories in China.

2023

The Ingredients division sold property, plant and equipment in China to its local joint venture partner for a profit of £3m. The Sugar division booked a £6m non-cash provision for a financial guarantee when its 30% associate in South Africa went into business rescue.

8. Analysis of net debt
	At 16 September 2023	Cash flow	Acquisition and disposals	New leases, non-cash items and transfers	Exchange adjustments	At 14 September 2024
	£m	£m	£m	£m	£m	£m
Short-term loans	(99)	50	(25)	-	3	(71)
Long-term loans	(394)	(66)	-	-	6	(454)
Lease liabilities	(3,160)	348	(8	(301)	56	(3,065)
Total liabilities from financing activities	(3,653)	332	(33)	(301)	65	(3,590)
Cash at bank and in hand, cash equivalents and overdrafts	1,388	(27)	-	-	(126)	1,235
Current asset Investments	-	334	-	-	-	334
Net debt including lease liabilities	(2,265)	639	(33)	(301)	(61)	(2,021)

	At 17 September 2022	Cash flow	Acquisition and disposals	New leases, non-cash items and transfers	Exchange adjustments	At 16 September 2023
	£m	£m	£m	£m	£m	£m
Short-term loans	(31)	13	(1)	(87)	7	(99)
Long-term loans	(480)	-	(1)	87	-	(394)
Lease liabilities	(3,252)	308	-	(279)	63	(3,160)
Total liabilities from financing activities	(3,763)	321	(2)	(279)	70	(3,653)
Cash at bank and in hand, cash equivalents and overdrafts	1,995	(534)	-	-	(73)	1,388
Current asset Investments	4	(3)	-	-	(1)	-
Net debt including lease liabilities	(1,764)	(216)	(2)	(279)	(4)	(2,265)

Reconciliation of net debt to balance sheet	2024	2023
	£m	£m
Cash and cash equivalents	1,323	1,457
Current asset investments	334	-
Current loans and overdrafts	(159)	(168)
Non-current loans	(454)	(394)
Lease liabilities	(3,065)	(3,160)
Net debt including lease liabilities	(2,021)	(2,265)

Roll forward of the liabilities associated with interest paid		2024	2023
	Note	£m	£m
Opening balance		(25)	(18)
Interest expense		(135)	(128)
Interest paid	3	140	118
Interest capitalised	4	(5)	-
Effect of hyperinflationary economies		-	3
Closing balance		(25)	(25)

9.Related parties

The Group has a controlling shareholder relationship with its parent company, Wittington Investments Limited, with the trustees of the Garfield Weston Foundation and with certain other individuals who hold shares in the Company. Further details of the controlling shareholder relationship are included in note 29 in the 2024 ABF Group Annual Report. The Group has a related party relationship with its associates and joint ventures (see note 29) and with its directors. In the course of normal operations, related party transactions entered into by the Group have been contracted on an arm's length basis.

Material transactions and year end balances with related parties were as follows:

		2024	2023
	Sub note	£'000	£'000
Charges to Wittington Investments Limited in respect of services provided by the Company and its subsidiary undertakings		984	985
Sales to fellow subsidiary undertakings on normal trading terms	1	19	18
Sales to companies with common key management personnel on normal trading terms	2	9,740	9,912
Amounts due from companies with common key management personnel	2	770	1,028
Sales to joint ventures on normal trading terms		23,172	40,645
Sales to associates on normal trading terms		103,248	88,753
Purchases from joint ventures on normal trading terms		463,030	482,267
Purchases from associates on normal trading terms		76,185	97,844
Amounts due from joint ventures		3,899	36,986
Amounts due from associates		7,804	8,745
Amounts due to joint ventures		30,240	17,609
Amounts due to associates		1,219	7,161

1. The fellow subsidiary undertaking is Fortnum and Mason plc.

2. The company with common key management personnel is the George Weston Limited group, in Canada.

Prior year amounts due from joint ventures included £32m (£4m of which was current) of finance lease receivables and the remainder was trading balances. In the current year all amounts due are trading balances.

10. Other Information

The financial information set out above does not constitute the Company's statutory accounts for the 52 weeks ended 14 September 2024, or the 52 weeks ended 16 September 2023. Statutory accounts for 2023 have been delivered to the Registrar of Companies and those for 2024 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts. Their reports were (i) unqualified, (ii) did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts.

11. Basis of preparation

The Company presents its consolidated financial statements in sterling, rounded to the nearest million, prepared on the historical cost basis except that current biological assets and certain financial instruments are stated at fair value, and assets classified as held for sale are stated at the lower of carrying amount and fair value less costs to sell.

The preparation of financial statements under Adopted IFRS requires management to make judgements, estimates and assumptions about the reported amounts of assets and liabilities, income and expenses and the disclosure of contingent assets and liabilities. The estimates and associated assumptions are based on experience. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed regularly. Revisions to accounting estimates are recognised prospectively from when the estimates are revised.

Details of accounting standards which came into force in the year are set out in note 12 below.

The Group's consolidated financial statements are prepared to the Saturday nearest to 15 September. Accordingly, they have been prepared for the 52 weeks ended 14 September 2024 (2023 - 52 weeks ended 16 September 2023).

To avoid delay in the preparation of the consolidated financial statements, the results of certain subsidiaries, joint ventures and associates are included to 31 August each year.

Adjustments have been made where appropriate for significant transactions or events occurring between 31 August and 14 September.

12. New accounting standards

The Group adopted the following accounting standards and amendments during the year with no significant impact:

International Tax Reform - Pillar Two Model Rules (Amendments to IAS 12)

Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)

Definition of Accounting Estimates (Amendments to IAS 8)

Disclosure of Accounting policies (Amendments to IAS 1 and IFRS Practice Statement 2)

IFRS 17 Insurance Contracts, Amendments to IFRS 17, Initial Adoption of IFRS 17 and IFRS 9 - Comparative Information

The Group is assessing the impact of the following standards, interpretations and amendments that are not yet effective.

Where already endorsed by the UKEB, these changes will be adopted on the effective dates noted. Where not yet endorsed by the UKEB, the adoption date is less certain:

Lease Liability in a Sale and Leaseback (Amendments to IFRS 16), effective 2025 financial year

Amendments to IAS 1 Presentation of Financial Statements, effective 2025 financial year

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1), effective 2025 financial year

Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), effective 2025 financial year

Lack of Exchangeability (Amendments to IAS 21), effective 2026 financial year

IFRS 18 Presentation and Disclosures in Financial Statements, effective 2028 financial year (not yet endorsed by UKEB)

Amendments to the Classification and Measurement of Financial Instruments effective 2027 financial year (not yet endorsed by UKEB).

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 IFRS measure	Definition/purpose	Reconciliation/calculation
Like-for-like sales	No direct equivalent	The like-for-like sales metric enables measurement of the performance of our retail stores on a comparable year-on-year basis. This measure represents the change in sales at constant currency in our retail stores adjusted for new stores, closures and relocations. Refits, extensions and downsizes are also adjusted for if a store's retail square footage changes by 10% or more. For each change described above, a store's sales are excluded from like-for-like sales for one year. No adjustments are made for disruption during refits, extensions or downsizes if a store's retail square footage changes by less than 10%, for cannibalisation by new stores, or for the timing of national or bank holidays. It is measured against comparable trading days in each year.	Consistent with the definition given
Adjusted operating profit	Operating profit	Adjusted operating profit is stated before amortisation of non- operating intangibles, transaction costs, amortisation of fair value adjustments made to acquired inventory, profits less losses on disposal of non-current assets and exceptional items. Items defined above which arise in the Group's joint ventures and associates are also treated as adjusting items for the purposes of Adjusted operating profit.	A reconciliation of this measure is provided on the face of the consolidated income statement and by operating segment in note 1 of the financial statements
Adjusted operating (profit) margin	No direct equivalent	Adjusted operating (profit) margin is Adjusted operating profit as a percentage of revenue.	See note A
Adjusted profit before tax	Profit before tax	Adjusted profit before tax is stated before amortisation of non- operating intangibles, transaction costs, amortisation of fair value adjustments made to acquired inventory, profits less losses on disposal of non-current assets, 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.	A reconciliation of this measure is provided on the face of the consolidated income statement and by operating segment in note 1 of the financial statements
Adjusted earnings and Adjusted earnings per share	Earnings and earnings per share	Adjusted earnings and Adjusted earnings per share are stated before amortisation of non-operating intangibles, transaction costs, amortisation of fair value adjustments made to acquired inventory, profits less losses on disposal of non-current assets, 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.	Reconciliations of these measures are provided in note 7 of the financial statements
Exceptional items	No direct equivalent	Exceptional items are items of income and expenditure which are significant and unusual in nature and are considered of such significance that they require separate disclosure on the face of the income statement.	Exceptional items are included on the face of the consolidated income statement with further detail provided in note 2 of the financial statements
Constant currency	Revenue and Adjusted operating profit (non- IFRS) measure	Constant currency measures are derived by translating the relevant prior year figures at current year average exchange rates, except for countries where CPI has escalated to extreme levels, in which case actual exchange rates are used. There are currently three countries where the Group has operations in this position - Argentina, Venezuela and Turkey.	See note B
Effective tax rate	No direct equivalent	This measure is the tax charge for the year expressed as a percentage of profit before tax.	Whilst the Effective tax rate is not disclosed, a reconciliation of the tax charge on profit before tax at the UK corporation tax rate to the actual tax charge is provided in note 5 of the financial statements
Adjusted effective tax rate	No direct equivalent	This measure is the tax charge for the year excluding tax on adjusting items expressed as a percentage of Adjusted profit before tax.	The tax impact of reconciling items between profit before tax and Adjusted profit before tax is shown in note 7 of the financial statements
Dividend cover	No direct equivalent	Dividend cover is the ratio of Adjusted earnings per share to dividends per share relating to the year.	See note C
Capital expenditure	No direct equivalent	Capital expenditure is a measure of investment in non-current assets in existing businesses. It comprises cash outflows from the purchase of property, plant and equipment and intangibles.	See note D
Gross investment	No direct equivalent	Gross investment is a measure of investment in non-current assets in existing 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.	See note E
Net cash/debt before lease liabilities	No direct equivalent	This measure comprises cash, cash equivalents and overdrafts, current asset investments and loans.	A reconciliation of this measure is shown in note 8
Net cash/debt including lease liabilities	No direct equivalent	This measure comprises cash, cash equivalents and overdrafts, current asset investments, loans and lease liabilities.	A reconciliation of this measure is shown in note 8
Adjusted EBITDA	Adjusted operating profit (non-IFRS) measure	Adjusted EBITDA is stated before depreciation, amortisation and impairments charged to Adjusted operating profit.	See note F
Financial leverage ratio	No direct equivalent	Financial leverage is the ratio of net cash/debt including lease liabilities to Adjusted EBITDA.	See note F
Free cash flow	No direct equivalent	This measure represents the cash that the Group generates from its operations after maintaining and investing in its capital assets. All the items below Adjusted EBITDA can be found on the face of the cash flow statement or derived directly from it. Working capital comprises the movements in inventories, receivables and payables within net cash generated from operating activities. Net interest paid is the sum of interest received within net cash used in investing activities and interest paid within net cash used in financing activities. Share of adjusted profit after tax from joint ventures and associates is the amount on the face of the cash flow statement, plus the £3m (2023 - £3m) non-operating intangible amortisation which is not included in Adjusted EBITDA. Other includes all other items from net cash generated from operating activities and net cash used in investing activities except for the purchase and sale of subsidiaries, joint ventures and associates, plus dividends paid to non-controlling interests and the movement from changes in own shares held.	See note G
Total liquidity	No direct equivalent	Total liquidity comprises cash, cash equivalents and current asset 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 18. 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 19. 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 14 September 2024, this comprised the RCF.	See note H
(Average) capital employed	No direct equivalent	Capital employed is derived from the management balance sheet and does not reconcile directly to the 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.	Consistent with the definition given
Return on (average) capital employed	No direct equivalent	This measure expresses Adjusted operating profit as a percentage of Average capital employed.	Consistent with the definition given
(Average) working capital	No direct equivalent	Working capital is derived from the management balance sheet and does not reconcile directly to the 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.	Consistent with the definition given
(Average) working capital as a percentage of revenue	No direct equivalent	This measure expresses (Average) working capital as a percentage of revenue.	Consistent with the definition given

Note A

	Retail	Grocery	Ingredients	Sugar	Agriculture	Central and disposed business	Total
	£m	£m	£m	£m	£m	£m	£m
2024
External revenue from continuing businesses	9,448	4,242	2,134	2,529	1,650	70	20,073
Adjusted operating profit	1,108	511	233	199	41	(94)	1,998
Adjusted operating margin %	11.7%	12.1%	10.9%	7.9%	2.5%		10.0%
2023
External revenue from continuing businesses	9,008	4,198	2,157	2,474	1,840	73	19,750
Adjusted operating profit	735	448	214	179	41	(104)	1,513
Adjusted operating margin %	8.2%	10.7%	9.9%	7.2%	2.2%		7.7%

Note B

	Retail	Grocery	Ingredients	Sugar	Agriculture	Central and disposed business	Total
	£m	£m	£m	£m	£m	£m	£m
2024
External revenue from continuing businesses at actual rates	9,448	4,242	2,134	2,529	1,650	70	20,073
2023
External revenue from continuing businesses at actual rates	9,008	4,198	2,157	2,474	1,840	73	19,750
Impact of foreign exchange	(94)	(108)	(62)	(199)	(22)	(4)	(489)
External revenue from continuing businesses at constant currency	8,914	4,090	2,095	2,275	1,818	69	19,261
% change at constant currency	+6%	+4%	+2%	+11%	-9%		+4%

	Retail	Grocery	Ingredients	Sugar	Agriculture	Central and disposed business	Total
	£m	£m	£m	£m	£m	£m	£m
2024
Adjusted operating profit at actual rates	1,108	511	233	199	41	(94)	1,998
2023
Adjusted operating profit at actual rates	735	448	214	179	41	(104)	1,513
Impact of foreign exchange	(3)	(13)	(6)	(43)	(1)	-	(66)
Adjusted operating profit at constant currency	732	435	208	136	40	(104)	1,447
% change at constant currency	51%	+17%	+12%	+46%	+3%		+38%

Note C

	2024	2023
Adjusted earnings per share (in pence)	196.9	141.8
Dividend relating to the period (in pence) - excluding special dividend proposed	63.0	47.3
Dividend cover	3.1	3.0

Note D

	2024	2023
From the cash flow statement	£m	£m
Purchase of property, plant and equipment	1124	997
Purchase of intangibles	60	76
Capital expenditure	1184	1073

Note E

	2024	2023
From the cash flow statement	£m	£m
Purchase of property, plant and equipment	1124	997
Purchase of intangibles	60	76
Purchase of subsidiaries, joint ventures and associates	93	94
Purchase of other investments	4	4
Gross investment	1281	1,171

Note F

	2024	2023
	£m	£m
Adjusted operating profit	1998	1,513
Charged to adjusted operating profit:
Depreciation of property, plant and equipment and investment properties	555	531
Amortisation of operating intangibles	63	44
Depreciation of right-of-use assets and non-cash lease adjustments	294	273
Adjusted EBITDA	2910	2,361
Net debt including lease liabilities	(2,021)	(2,265)
Financial leverage ratio	0.7x	1.0x

Note G

	2024	2023
	£m	£m
Adjusted EBITDA (see note F)	2910	2,361
Repayment of lease liabilities net of incentives received	(308)	(246)
Working capital	305	(216)
Capital expenditure (see note D)	(1184)	(1,073)
Purchase of subsidiaries, joint ventures and associates	(93)	(94)
Sale of subsidiaries, joint ventures and associates	24	4
Net interest paid	(69)	(74)
Income taxes paid	(340)	(341)
Share of adjusted profit after tax from joint ventures and associates	(120)	(127)
Dividends received from joint ventures and associates	105	107
Other	125	(32)
Free cash flow	1355	269

Note H

	2024	2023
	£m	£m
Cash and cash equivalents	1,323	1,457
Current asset investments	334	-
Current loans and overdrafts	(159)	(168)
Non-qualifying non-current borrowings*	(63)	-
Estimated inaccessible cash	(66)	(73)
Qualifying credit facilities	1,500	1,500
Total liquidity	2,869	2,716

*At 14 September 2024, non-current borrowings on the face of the balance sheet included the £400m public bond due in 2034 (carrying value £391m) as qualifying borrowings.

Cautionary statements

Certain statements included in this report may constitute 'forward-looking statements'. Forward-looking statements are all statements that do not relate to historical facts and events, and include statements concerning the Company's plans, objectives, goals, financial condition, strategies and future operations and performance and the assumptions underlying these forward-looking statements. The Company often, but not always, uses the words 'may', 'will', 'could', 'believes', 'assumes', 'intends', 'estimates', 'expects', 'plans', 'seeks', 'approximately', 'aims', 'projects', 'anticipates' or similar expressions, or the negative thereof, to generally identify forward looking statements. Forward-looking statements may be set forth in a number of places in this report. The Company has based these forward-looking statements on the current view with respect to future events and financial performance. These views involve uncertainties and are subject to certain risks, the occurrence of which could cause actual results to differ materially from those predicted in the forward-looking statements contained in this report and from past results, performance or achievements. Although the Company believes that the estimates and the projections reflected in its forward-looking statements are reasonable, if one or more of the risks or uncertainties materialise or occur, including those which the Company has identified in its report, or if any of the Company's underlying assumptions prove to be incomplete or incorrect, the Company's actual results of operations may vary from those expected, estimated or projected. These forward-looking statements are made only as at the date of this report. Except to the extent required by law, the Company is not obliged to, and does not intend to, update or revise any forward-looking statements made in this report whether as a result of new information, future events or otherwise. All subsequent written or oral forward-looking statements attributable to the Company, or persons acting on the Company's behalf, are expressly qualified in their entirety by the cautionary statements contained throughout this report. As a result of these risks, uncertainties and assumptions, readers should not place undue reliance on these forward-looking statements and persons needing advice should consult an independent financial adviser. This report does not constitute an invitation to underwrite, subscribe for or otherwise acquire or dispose of any shares or other securities in the Company. No statement in this report is intended to be, nor should be construed as, a profit forecast or a profit estimate.

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