ABF grows grocery operations

By Catherine Boal

- Last updated on GMT

Related tags: Associated british foods

Associated British Foods (ABF), owner of the UK's third largest
bread brand Kingsmill, has extended its grocery portfolio with the
acquisition of Indian food brand Patak's.

The Indian food manufacturer owns assets worth around £40 million (€59m) and took £66 million (€97.4m) revenue in the year ending September 2006. Today, in a statement announcing the takeover, ABF said the deal would give it a leading position in the UK's world food sector and allow the company to drive Patak's international sales. The sale is expected to be completed by August. It will help boost ABF's large grocery portfolio which saw a dip in operating profits from £84 million (€123.6m) to £64 million (€94.2m) this year - mainly due to disappointing bakery sales. ABF's bakery operations make up around 16 per cent of the firm's total business. Earlier this year, the group posted a 7 per cent rise in full-year profits to £272 million (€400.5m) but noted a weak performance in its baking subsidiary Allied Bakeries. The company blamed high temperatures and a highly competitive UK bakery market for the downturn which was exacerbated by a series of tampering incidents at the firm's Kingsmill factory in England. Now Allied Bakeries are embarking on a relaunch of the Kingsmill brand with product reformulation, increased marketing and changes to packaging and loaf size.

Related topics: Markets

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