Associated British Foods Share Discussion Threads

[gateside] 02/6/2008 16:33

ABF announces the merger of Jordans and Ryvita

Associated British Foods plc ("ABF"), the international food, ingredients and retail group, has today announced that it has reached agreement with UK breakfast cereal and cereal bar business, W Jordan & Son (Silo) Limited ("Jordans"), to merge the Jordans business with its Ryvita crispbread and healthy snacks business. ABF will have a 62% interest in the combined business with the balance held by the existing shareholders of Jordans. The Jordan family will remain fully involved in the business. Completion is subject to certain regulatory clearances and is expected to take place during the third quarter of 2008.

Jordans is a successful and leading breakfast cereal and cereal bar business in the UK. It was founded by the Jordan family from whom ABF acquired a 20% shareholding last year. The Jordans brand has a strong and differentiated consumer position based on its use of natural, organic and Conservation Grade® ingredients. Its products range from breakfast cereals to cereal bars, muesli and oat porridge. The company has three manufacturing sites and has its head office in Biggleswade, Bedfordshire. It had unaudited sales of £85m for the year ended 29 February 2008 and unaudited gross assets of £42m at 29 February 2008.

Ryvita has an 80 year heritage and has become a byword for crispbread. Ryvita is committed to promoting healthy eating and provides a range of healthy snacks utilising wholegrain cereals, which are low in fat and calories. It has successfully extended its brand with the development of a range of healthy snacks including Minis and cereal Goodness bars. It has manufacturing sites in Poole, Dorset and Stockport, Greater Manchester.

The combination of Jordans and Ryvita will create a leading position for the supply of products to meet the increasing consumer demand for natural ingredients and healthy eating. Some cost savings will be achieved and both brands will be developed. The complementary technologies currently used by each business will provide new product opportunities and the increased scale will enable a greater impact in all sales channels particularly in convenience and impulse. Faster overseas expansion of the Jordans brand will be achieved using ABF's international grocery presence.

Bill Jordan, Chairman of Jordans, said:

"Both David and I believe passionately in making good quality wholegrain cereal to promote the health of our customers and protect the countryside. Jordans and Ryvita have built strong reputations for milling wholegrain cereals and it seems very natural to us that we should form a partnership that draws on these links. From being a small producer promoting whole grains, to what was then a niche group of consumers, Jordans has now reached the point where the benefit of wholegrain cereal is understood by a mainstream, and international, market. This new partnership gives us scale and the ability to share our beliefs, in the benefits of natural foods and protecting the countryside, with even more people."

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

"I am delighted that the relationship built with the Jordan family over the last year has enabled the merging of these two fine businesses. We are creating a strong new business and I look forward to the further development of both the Jordans and Ryvita brands."

[gateside] 13/4/2008 18:37

LONDON (Thomson Financial) - Sir Philip Green is understood to be looking for buyers for Bhs, his department store chain, in order to concentrate on Topshop, which is expanding into the US with its Kate Moss clothing range, according to The Independent on Sunday.

The IoS cited retail sources close to Sir Philip as saying he wants to sell Bhs, which, along with other retailers, is having a torrid time on the high street.

It quoted a source as saying: "Sir Philip has talked to a number of people about buying Bhs. He's caught in a bit of a problem -- he wants to get out of Bhs and spend more time on Topshop, which is going great guns.

"But selling Bhs is proving tough because no one wants to take on all 180 shops at a time like this. There are many, like Primark, who would like some of the town centre sites, and Marks & Spencer would like about 20 stores."

However, the source is also quoted as saying Green would "be loath to break up the chain, and certainly wouldn't want to put staff in a difficult position".

The IoS identifies Tesco as another potential buyer.

In an interview with Thomson Financial News last month, Green described current trading as "horrible", predicted profit warnings from his major quoted retail rivals in the next few months, and revealed Bhs would see full-year operating profit fall from the previous year's 50 million pounds.

[gateside] 18/1/2008 08:22

Associated British Foods has now largely come through the dislocation from the EU sugar regime changes and while earnings per share will only edge higher in the current year, from last time's 52.9p to about 54p, the pace of growth should pick up again next time. A p/e about 16.5 is well above the likes of M&S and Next and the smaller food companies, but two or three points below Unilever and Cadbury Schweppes. The shares are worth hanging onto in difficult markets says the FT.

[cambium] 17/1/2008 08:51

Graet call Rick, your laughing today,

[jezboy1] 16/1/2008 12:16

Hey guys - update tomorrow?

[gateside] 07/12/2007 13:37

Good upbeat AGM statement. But then I expect nothing less from this excellent company.

...."Listening to me talk about the major investment of recent years, shareholders
are entitled to ask whether we can continue to make the necessary level of
investment to support and grow our businesses. The answer is a confident 'Yes'.
The group is lightly borrowed for one of its size; cash flow is strong. There
is ample capacity to continue to back our businesses with substantial investment
where appropriate; and, very importantly, well within the bounds of prudent
financing."....

[gateside] 19/11/2007 07:58

Associated British Foods is weighing up plans to quit bread baking, severing links with an industry on which it was founded more than 70 years ago, according to the Sunday Times.

[gateside] 07/11/2007 07:23

Associated British Foods' odd recipe is still working

Nick Hasell: Tempus

Associated British Foods' combination of a rapidly growing discount fashion chain with a mature sugar and groceries business makes it one of the odder constituents of the FTSE 100. That peculiarity would also appear to extend to the company's valuation. With earnings in the 12 months to September 15 up 4 per cent, and forecast to grow just 1 per cent in the current year – which takes them back only to the level of three years ago – a forward earnings multiple of 17 makes ABF look mystifyingly expensive. Neither is there obvious support from the dividend, which offers a sub-market yield of 2.1 per cent – strangely low for a company in which the founding family retains a majority stake.

It was partly that calculation that caused ABF shares to fall by up to 3 per cent yesterday. They have run up 8 per cent over the past fortnight and with the numbers meeting, rather than beating, forecasts and with next year's estimates unchanged there was nothing to send them higher.

The results themselves were a mixed bag. Sugar was the star, with operating profits up 73 per cent, but that surge was driven by the first full-year contribution from Illovo, the South African producer in which ABF holds 51 per cent. Primark, now accounting for a third of earnings, also fared well, with operating profits 20 per cent higher on sales up 37 per cent. However, poor summer weather and the effects of rapid expansion in space – in which new stores took sales from old – kept like-for-like growth at a modest 1 per cent. Increased discounting and a higher depreciation charge saw margins fall from 14.2 per cent to 12.5 per cent. It was in groceries, where operating profits fell 16 per cent, that ABF's difficulties were most evident. Increased competition and inability to pass on full effects of higher wheat prices pulled Allied Bakeries into loss, while higher corn oil prices crimped Mazola. A £7 million translation hit from a weak US dollar also weighed.

So why not take profits? The option is perhaps tempting, since growth by Primark, a big influence on the shares' outperformance, will slow this year after the kick from conversion of the acquired Littlewoods stores. There is also a risk that the chain – now selling one in nine clothing items in the UK – may face a customer backlash if its wares seem ubiquitous.

The rejoinder is that reform of the EU sugar regime, the cause of profit downgrades over the past two years, has now run its course, meaning the current year should mark that division's lowest ebb. The easing of that burden is evident in forecasts of 11 per cent earnings growth in the next financial year, which explains the shares' rating. Although ABF, at 890½p, offers little short-term excitement, it has lost none of its status as one of the FTSE 100's most reliable long-term performers. Hold.

[gateside] 07/11/2007 07:23

I love it. Final Results day comes and goes and not a single comment. Nobody interested in a solid and low risk FTSE100 company in these turbulent times?

Goes to show that the majority of people on ADVFN are not much more than just gamblers.

[gateside] 04/10/2007 08:17

28% when results were last announced

See page 2 of the Interim Report

[capntubs] 04/10/2007 07:32

Morning - can anybody easily steer me towards a figure for how much of ABF's profits are forecast to come from UK Sugar beet in this current year.

Many thanks

[spacemoggy] 25/9/2007 14:56

Long 775p...it's bounced several times off the RSI 30 over the last 3 years...Rick

[mbthedude] 21/9/2007 17:04

Been tracking this stock now for a few weeks, and wondering why it is dropping when the buys far outnumber the sells on a daily basis?

[gateside] 14/9/2007 11:08

Acquisition of a 20% stake in Jordans
14 September 2007
Associated British Foods plc ("ABF"), the international food, ingredients and retail group, has today announced that it has reached agreement with UK breakfast cereal and cereal bar business, W Jordan & Son (Silo) Limited ("Jordans"), to acquire 20% of its share capital from the founding Jordan family.

Jordans is a successful and leading breakfast cereal and cereal bar business in the UK. It was founded by, and remains under the control of, the Jordan family. The Jordans brand has a strong and differentiated consumer position based on its use of natural and Conservation Grade® ingredients. Its products range from breakfast cereals to cereal bars, muesli and oat porridge. The company has three manufacturing sites and has its head office in Biggleswade, Bedfordshire. It had sales of £81m for the year ended February 2007 and gross assets of £40m at 28 February 2007.

ABF already has extensive interests and expertise in cereal-based branded foods both in the UK and internationally. It will be a strong partner to ensure the further development of the Jordans business.

George Weston, Chief Executive of Associated British Foods, said

"This investment is an exciting development for our UK branded grocery business. Jordans is a wonderful brand which is positioned well to benefit from the consumer's growing desire for natural ingredients and healthy eating. I look forward to the development of the brand's full potential."

[gateside] 10/9/2007 20:37

Take your pick!

Evolution Securities say Reduce ~ Target 820p
Panmure Gordon say Buy ~ Target 970p

[gateside] 24/8/2007 09:23

Investment in China's beet sugar industry




Associated British Foods plc ("ABF"), the international food, ingredients and
retail group, has today announced that it has reached agreement with the Hebei
Tian Lu Sugar Group ("Tian Lu"), based in the north east of China, to form a
joint venture. The formation of the joint venture, to be called Bo Tian, is
subject to government approval with clearance anticipated by the end of
September.


Tian Lu will contribute its existing beet sugar business to the joint venture
and ABF will contribute some #70m to fund our plans for future development and
expansion. ABF will hold 51% and Tian Lu will hold the remaining 49% of the
joint venture.


The Chinese beet sugar industry is centred in the north east where the provinces
have abundant high quality arable land with ideal weather conditions to produce
high sugar content in the beet. Tian Lu operates four beet sugar factories:
Wangkui and Yi'an in Heilongjiang province, Zhangbei in Hebei province and
Qianqi in Inner Mongolia. Sugar production was 145,000 tonnes last year with
sales of #34m.


A significant increase in sugar production is planned. There is a major
opportunity to improve beet yields by the application of British Sugar's
European beet sugar expertise through better agricultural practices and
technology transfer. In addition, refinery capacity will be increased through
investment and efficiency improvements.



The much larger cane sugar industry is centred in southern China. British Sugar
has four cane sugar refineries in Guangxi province. Following years of
investment in refinery capacity and efficiency and agricultural development,
sugar production will exceed 500,000 tonnes this financial year.



George Weston, Chief Executive of Associated British Foods, said



"This acquisition represents another exciting development for us in China. Our
experience in operating cane sugar factories in southern China, combined with
our skills as the lowest cost beet sugar producer in Europe will enable us to
introduce improvements quickly and efficiently to China's beet sugar industry."

[welshbob] 09/8/2007 16:43

I agree but its strange times with the market these past 10 days Rexam did the same up-down yesterday and again this a.m. I am just going to sit tight until things settle down. ABF will be fine in the long run..........I hope

[big investor2] 09/8/2007 16:06

up 3% much of afternoon, then slump back to square. freaky

[big investor2] 09/8/2007 16:06

up 3% much of afternoon, then slump back to square. freaky

[1ch] 30/7/2007 08:31

Think 815 / 820 is at the bottom now, although may take some weeks to finally recover to 880p or more.

[aldi1] 27/7/2007 15:31

quite right 1CH.i went short cart at 9.00 and closed at 3.00

i dont care about funny-mentals.price is all that matters.

oversold,overbought,this indicator,that indicator...none of these matter to me.

i,m short from 8.82,8.74 and 8.45 as the trend is down.this could change but my stops follow the 30 day ema.

we'll see.

edit - short again at 8.21 the bigger picture is too compelling