Latest news with #GeorgeWeston
Yahoo
3 days ago
- Business
- Yahoo
ABF snaps up Hovis despite sales, profit pressures in UK bread
Associated British Foods (ABF) is to acquire the Hovis bread business from UK headquartered private-equity firm Endless. ABF confirmed the deal today (15 August), ending months of speculation over the UK-listed company's plans for its own bread division, Allied Bakeries, the Kingsmill and Sunblest brand owner put up for review in April. However, rather than opting to sell Allied Bakeries after ABF said in April that the division was facing a 'very challenging market', the London-listed company is combining it with Hovis to 'create a profitable UK bread business that is sustainable over the long term'. Those comments came from ABF's CEO George Weston, who added in a statement: 'Supporting the Hovis and Kingsmill brands with well-invested and efficient operations will also enable innovation and growth. 'This solution will create value for shareholders, provide greater choice for consumers and increase efficiencies for customers.' Financial terms for the transaction were not disclosed by ABF as it said it had 'reached an agreement to acquire Hovis', subject to regulatory approval. Endless bought the business in 2020. At the time, Hovis was 51%-owned by US investment firm The Gores Group and UK food company Premier Foods, the owner of the Mr Kipling cakes brand. Jefferies International estimated the deal value at £75m ($101.6m at today's exchange rate) in terms of what it deemed in 2020 as 'implied gross proceeds'. Endless provided a statement in response to Just Food's request for comment, noting the deal will need to be approved by the UK's Competition and Markets Authority (CMA). Aidan Robson, a managing partner of Endless, said: 'We are proud of the journey we've shared with Hovis to date, supporting this historic brand in a highly competitive and challenging market. The transaction with ABF represents an opportunity to create a platform for long-term sustainability in the bakery sector for the benefit of retailers and consumers. "While we work towards achieving CMA clearance of the transaction, our focus remains on Hovis to continue delivering exceptional products and service to its customers.' When ABF revealed the review of Allied Bakeries in April in its financial results briefing for the 24 weeks to 1 March, the Primark clothing stores owner said the bakery division had added to the group's operating losses amid 'lower' volumes and sales. ABF added more commentary today: 'Profitability at Allied Bakeries has been increasingly challenged in recent years by a decline in demand for pre-sliced, packaged bread and a loss of scale in Allied Bakeries' nationwide distribution network serving the major retailers with daily delivery of bread and bakery goods.' However, it added: 'The acquisition [Hovis] will combine the production and distribution activities of the two businesses, driving significant costs synergies and efficiencies… 'The combined business will be better placed to compete effectively and to establish a stable platform for product innovation in the segments of the UK bakery category that are growing as a result of changing consumer tastes and needs.' James Watson, a UK partner at consultancy Argon & Co., said: 'The Hovis-Kingsmill merger is a clear sign of the pressures facing the UK bakery sector. With inflation driving up costs and bread consumption in steady decline, consolidation was always a question of when, not if. 'The deal gives ABF a new market leader with 41% share, overtaking Warburtons' 34%. But behind the headline is a tough reality: both businesses have been making unsustainable losses. The real prize here is efficiency – rationalising overlapping bakery networks and cutting costs in procurement, logistics, and manufacturing.' ABF said the forward plans for the combined business include the 'improvement in existing products and expansion into new product ranges'. Allied Bakeries also produces the Allinson's bread and flours brand. The division of ABF also supplies UK retailers and supermarkets with private-label bread products. ABF does not break down the financial performance of Allied Bakeries or for other food brands within its grocery reporting unit, which includes Twinings tea and the Patak's and Blue Dragon sauces lines. Group results for the 24 weeks to 1 March showed a 2% decline in sales to £9.51bn, while adjusted operating profit dropped 12% to £835m. Profit before tax fell 21% to £692m with an EPS decrease of 8% to 83.6 pence. Shares in ABF were little changed at 2,270 pence in London today following the Hovis announcement. Watson at Argon added: 'Execution will be everything. Disrupting existing customer relationships now, while both brands are losing share, would risk compounding the problem. 'Longer term, the challenge is to stop managing decline and start building momentum. That means addressing structural issues in the bread market and responding faster to shifting consumer trends - whether that's health, speciality products, or premium lines.' "ABF snaps up Hovis despite sales, profit pressures in UK bread" was originally created and published by Just Food, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. 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Yahoo
3 days ago
- Business
- Yahoo
AB Foods to buy Hovis, expanding UK bread portfolio
LONDON (Reuters) -Associated British Foods has agreed to buy bread brand Hovis from private equity firm Endless, bolstering the group's loss-making Allied Bakeries unit which owns the Kingsmill, Sunblest and Allinson's brands, it said on Friday. AB Foods said in April it was "evaluating strategic options" for Allied Bakeries, saying it continued to face a "very challenging market". The group said in May it was in talks with Endless about a potential deal. The purchase price was not disclosed. 'This transaction will create a UK bakeries business that is both profitable and sustainable over the long term," AB Foods CEO George Weston said. The deal is subject to regulatory approval. It will be scrutinised by the competition authorities given the combined bread market share of Allied Bakeries and Hovis. However, regulator the Competition and Markets Authority is under pressure from the UK government to support growth.
Reuters
3 days ago
- Business
- Reuters
AB Foods to buy Hovis, expanding UK bread portfolio
LONDON, Aug 15 (Reuters) - Associated British Foods (ABF.L), opens new tab has agreed to buy bread brand Hovis from private equity firm Endless, bolstering the group's loss-making Allied Bakeries unit which owns the Kingsmill, Sunblest and Allinson's brands, it said on Friday. AB Foods said in April it was "evaluating strategic options" for Allied Bakeries, saying it continued to face a "very challenging market". The group said in May it was in talks with Endless about a potential deal. The purchase price was not disclosed. 'This transaction will create a UK bakeries business that is both profitable and sustainable over the long term," AB Foods CEO George Weston said. The deal is subject to regulatory approval. It will be scrutinised by the competition authorities given the combined bread market share of Allied Bakeries and Hovis. However, regulator the Competition and Markets Authority is under pressure from the UK government to support growth.
Yahoo
29-07-2025
- Business
- Yahoo
Gold, oil lift TSX futures as focus shifts to trade deals
(Reuters) -Futures tied to Canada's main stock index rose on Tuesday, tracking gains in gold and energy prices, while investors assessed corporate earnings and awaited trade deals with the U.S. ahead of the August 1 tariff deadline. Futures on the S&P/TSX index were up 0.5% at 1,638.50 points by 06:18 a.m. ET (1018 GMT). The benchmark closed lower on Monday. A much-anticipated European Union-U.S. trade agreement was announced on Sunday. However, the initial relief over Europe's 15% levy on exports to the U.S. quickly soured when set against the 1% to 2% that stood before U.S. President Donald Trump took office. Gold and oil prices edged up as initial euphoria over the U.S.-EU trade truce faded, while copper prices slipped on Tuesday. Trump also flagged a "world tariff" rate of 15% to 20% on Monday, for countries that were not negotiating a deal, among the highest rates since the Great Depression of the 1930s. Also on Monday, Prime Minister Mark Carney said Canada-U.S. trade talks were in an intense phase and reiterated that an agreement without any tariffs at all was unlikely. In corporate news, Canadian retailer George Weston reported second-quarter revenue above estimates and announced a stock split. FOR CANADIAN MARKETS NEWS, CLICK ON CODES: TSX market report [.TO] Canadian dollar and bonds report [CAD/] [CA/] Reuters global stocks poll for Canada Canadian markets directory Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-06-2025
- Business
- Yahoo
2 cheap FTSE 100 shares to consider buying in June
How do we tell if a FTSE 100 stock looks cheap? One way is to seek out share prices that have fallen this year, and that brings Associated British Foods (LSE: ABF) into view. The shares are up from their 52-week low in March, but we're still looking at a 12-month fall of 20%. Some of the weakness has to be down to retail fears facing the company's Primark high street chain. We also have at a collection of five different business here, with Grocery, Ingredients, Sugar, and Agriculture divisions added to Retail. That brings diversification, which is a good thing. But it can also suggest a company lacks focus, and top management have to keep their eyes on numerous balls. With first-half results in April, CEO George Weston said he was 'frustrated with the results in our Sugar business.' But the other four are doing fine, in line with full-year guidance. The update gave the share price a boost at the time. Forecasts indicate a fall in earnings per share for the full year, and that has to be holding the stock back. But analysts expect a return to earnings growth that could drop the price-to-earnings (P/E) ratio to under 9.5 by 2027. Associated British Foods had net debt of £2.8bn at 1 March, up from £2.5bn a year previously. Against a market cap of nearly £15bn, that doesn't worry me too much. But it's worth keeping an eye on. There's risk from retail exposure, and a possibly perceived lack of focus. But I think long-term investors should consider it. Looking for FTSE 100 stocks on low P/E valuations can also throw up candidates. And that draws my attention to M&G (LSE: MNG). M&G seems to come up in a number of my searches on different factors, like its big 8.3% forecast dividend yield. There's a forecast P/E of 10 on the cards for the current year. And a mooted recovery from the past couple of tough years could see it drop close to eight by 2027. Investment management companies are often on lower P/Es and can be cyclical. But the predicted earnings growth over the next few years should cover the dividends, which are also expected to rise. The cover might be a bit thin though. With 2024 results released in March, CEO Andrea Rossi spoke of 'two new targets for 2025-2027: to grow adjusted operating profit before tax on average by 5% or more per annum, and to generate £2.7 billion of operating capital.' The boss added: 'I am delighted to announce that today we are moving to a progressive dividend policy, starting with a 2% increase for the 2024 total dividend per share.' That all sounds ambitiously positive. But the risk hasn't gone away. The world seem to be lurching from one trade-related economic crunch to another on an almost daily basis. And if M&G's dividends can't keep up with inflation, the shares could take another knock. But I see a decent chance of a bull run here and feel it's worth a closer look. The post 2 cheap FTSE 100 shares to consider buying in June appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods Plc and M&g Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
