Financial Statement Analysis of Abf

Topics: Financial ratios, Financial ratio, Generally Accepted Accounting Principles Pages: 12 (3870 words) Published: December 28, 2011

Associated British Foods (ABF) is a diversified international company that deals with food, ingredients, retail textile products, research and technology. The company’s business falls under five (5) major segments namely: * Grocery

* Agriculture
* Sugar
* Ingredients
* Retail
From its inception in November 1935 as Food Investments Limited and its rapid change to Allied Bakeries Limited five weeks later, the business grew dramatically as a broad-based food manufacturing organisation, becoming Associated British Foods Limited in February 1960.  It finally changed to Associated British Foods plc in May 1982 to comply with legal requirements being a global food and ingredients business, with sales and manufacturing operations across Europe, the Americas, the United Kingdom, Africa, Asia and China.

The Grocery segment encompasses a number of major manufacturers of branded and private label products. These include hot beverages; sugars and sweeteners; vegetable oils; bread & baked goods; ethnic foods; herbs & spices; meat & dairy. Agriculture operates extensive international agribusiness operations delivering products, technology and services to the food, drink and animal feed sectors. The sugar segmentation comprises the sugar processing business, based in Europe, Africa and China, which is now the second largest in the world. The Ingredients segment operates globally in yeast and bakery ingredient production. In addition, it focuses on high-value ingredients for food and non-food applications. Finally the Retail segment comprises a major value fashion retail group Primark trading in the high streets of the UK, Ireland, Spain, Portugal, Belgium, Germany and the Netherlands.

Growth has been predominantly through acquisition and has resulted in a global group operating in 46 countries, employing 102,000 employees, with sales of £11.1 billion dollars. Their products carry brand names as Allinsons, Twinings, Patak’s, Mazola, Sliver Spoon and Ryvita. Included in ABF’s operations are research facilities namely Allied Technical Centre and the Central Laboratories in the UK. Subsidiaries are located in the US (ACH Foods), Australia (Waston Technologies), Germany and Finland (AB Enzymes). Competitors and Current Market Conditions

ABF always aim to achieve strong, sustainable leadership positions in markets that offer potential for profitable growth, and deliver quality products and services that are central to people’s lives. The company is guided by the watch words Efficiency, Quality, Shareholder Value and Growth. ABF’s Chairman, Mr. Charles Sinclair made a statement in September of 2011 saying that "Good results, and especially those achieved in difficult trading conditions, are not delivered by chance. They are the consequence of the hard work and enterprise of our employees." In most of its markets ABF’s products are considered as number one or a market leader. Competition in the baker’s yeast and Australian food business leaves ABF at second place at this time. However, despite ABF’s competition from Caterplan (Bestfoods UK Ltd) – one of the most prominent food companies in the world, Northern Foods Limited – one of the UK’S largest food manufacturers, Unilever PLC (London) – provider of washing powder, shampoo, toothpaste, teas, ice cream, oils and spreads for customers all over the world and Diageo – one of the world’s leading consumer goods companies, ABF still continues to be profitable yearly working around hectic competition from their competitors. The following is the financial highlights of ABF as of September 2011. Diagrams showing these highlights and additional data from 2007-2011 can be seen in Appendix 1. * Group revenue up 9% to 11.1bn

* Adjusted operating profit up 1% £920m
* Dividends per share up 4% 24.75p
* Net capital investment of £825m
The board reviews annually the material financial and non-financial...
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