Revenue for Associated British Foods’ agricultural division expected to drop

Associated British Foods has predicted that its agriculture division revenue for the first half of the year will drop. This comes in its trading update, before entering the close period for its interim results to 27 February 2016, scheduled for announcement on 19 April 2016. 

The group’s UK feed business, AB Connect, will bear the brunt of this drop. Despite this, strong trading at AB Vista – the division that provides products and technical services to the animal feed industry - drove further margin improvement for AB Agri as a whole.

A statement said: “For the half year we expect some progress in adjusted operating profit for the group although adjusted earnings per share are expected to be slightly lower.”

“Lower feed revenues for AB Connect were largely the result of lower sugar beet feed volumes combined with the effects of a mild winter on demand for ruminant feed.

“Speciality feed volumes were ahead of last year as the business increased market share in the domestic market more than offsetting lower export volumes.”

Good sales growth, particularly in Asia, Europe and the Middle East built on AB Vista’s success in feed enzymes. “In China, market conditions remain weak but the impact has been mitigated by improved purchasing and pricing together with success in winning contracts to supply more large-farm customers.”

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