CM3 Comment On Associated British Foods Investing £30m In Stockport Site

April 30, 2012 - PRLog -- CM3 heard recently that Associated British Foods is spending almost £30m to boost capacity and efficiency at its bakery in Stockport. The investment at the Allied Bakeries site, which employs around 400 staff, will see older equipment replaced to reduce energy consumption and improve quality. The site produces 1.6m loaves every week, which are sold under the Kingsmill, Allinson and supermarket own-label brands. The new equipment at the bakery, on Ashton Road in Bredbury, is due to be installed by June and it is anticipated that 50 posts will be created once the development is completed.

“Any investment that creates more jobs and boosts the local economy is fantastic,” said our source from CM3, a Manchester-based sales and marketing company, “ABF is a large and well-known company and it’s great that it’s investing locally.”

ABF, which also owns Primark and grocery brands Twinings, Patak’s and Ovaltine, announced in its results for the six months to March 3 that adjusted pre-tax profits were up three per cent to £363m as revenues increased 11 per cent to £5.8bn. Looking ahead, it forecast ‘substantial’ growth in operating profits for the full year, driven by higher margins at Primark and its sugar division. Primark saw like-for-like sales in the period increase two per cent, with total revenues up 15 per cent at £1.6bn, despite slow trading at the start of the financial year caused by warm weather. The chain saw its profit margins squeezed as it absorbed higher costs, but cotton prices have since fallen. ABF’s grocery arm saw revenues up four per cent to £1.8bn, while operating profits declined 30 per cent to £75m, driven by restructuring costs at its Australian business George Weston Foods.

Our source at CM3 said, “The company have been performing very well overall, which is a really good sign considering the current condition of the market. It’s a good indicator that the new bakery in Stockport has the chance to be very successful.”

Twinings and Ovaltine performed well with good tea sales in the US and strong growth for Ovaltine in developing markets, AB Foods said. ABF’s interim dividend will be 8.5p, up eight per cent on last year. Its shares rose 24p, or 1.98 per cent, at 1239p.