The number three bakers' yeast maker in Europe, ABF said trading continues to be in line with expectations similar to that seen at its December update with a positive contribution expected from acquisitions made during the last financial year.
The group, which supplies polyols, enzymes, yeast and bakery ingredients through its ingredients division, said that "yeast pricing has remained weak in North America and Turkey and higher molasses costs have affected profits in a number of countries," but on the flip side operations in Latin American and eastern Asia had "performed strongly."
In the second half of 2004, the owner of British Sugar leapt into the number three yeast position for Europe through the €1 billion purchase of Australian yeast giant Burns Philp: buying straight into strong potential earnings in a market currently topping 2.3 million tonnes and worth €1.16 billion annually.
"The global yeast market is growing at three to four per cent with particularly strong growth in developing countries - in China the market is moving at a 10 per cent pace," a spokesperson for ABF said at the time.
Yeast brands acquired through the Burns Philp acquisition include Mauri, Fleischmann and Calsa. The bakers' yeast business now trades under the AB Mauri name, that is now "well established", according to ABF's trading statement today.
The yeast market is soaring on the back of increasing demand for processed foods and a dynamic growth in food production, offsetting stagnant growth in developed countries that posts around 1 to 2 per cent.
The Burns Philp acquisition also expanded the bakery ingredients portfolio for the group - main products are bread improvers, conditioners, mixes, fats and oils. Combined with ABF's existing Cereform business, the new unit "has coverage of all significant markets…and low cost distribution," confirmed the firm today, adding that the integration of the bakery ingredients businesses "had made good progress."
In November last year ABF pulled in pre-tax profits of £525 million (€755m) on sales of £5.16bn, marking a 15 per cent rise on the previous year. Forecasts had predicted pre-tax profits in the £505 million range. At just under 6 per cent, the ingredients division contributed £294 million in sales to the overall £5.2 billion turnover for the group in 2004. Profit margin for the division rose by 1.9 per cent to 12.2 per cent, up from 10.3 per cent in 2003.