A second half trading update from Associated British Foods (ABF) confirms the closure of the company’s Vivergo Fuels wheat to bioethanol plant. Preliminary full year ABF results will be published in early November.
The ABF Agriculture division – AB Agri – is expected to see second half revenue growth of around 1% in the six months to September 13th 2025, driven by the group’s speciality feed and additives businesses. Compound feed sales were broadly flat in the period.
ABF warns that AB Agri’s adjusted operating profit in H2 will be significantly lower than for the second half of the previous year, largely due to a reduced contribution from its joint arable marketing venture with Cargill, Frontier Agriculture, due to the effect of the exceptional weather conditions experienced and one‐off costs.
The ABF sugar division, AB Sugar, which includes Vivergo Fuels, is forecast to make a full year adjusted operating loss of some £40 million. “Following extensive negotiations, the UK government decided not to provide the solution required for Vivergo to operate on a consistently profitable basis, and we therefore announced its closure,” says ABF.
Vivergo’s operating loss will be charged to ‘disposed and closed operations’ within the full year account, not AB Sugar. Therefore, the division is expected to be close to break-even with a sales decline of around 10%.
Second half sales and profitability for the UK and Spanish sugar businesses declined significantly due to persistently low European sugar prices and the high cost of beet. ABF says the closure of Vivergo and a restructure to reduce its beet refining operation in Spain will see impairment charges of approximately £200m to be split between the current and next financial year.
The division expects some improvement in Sugar profitability in full year 2026, with lower contract beet prices in Europe agreed, but warns that sugar prices remain below its previous expectations.
“I’m pleased with how the Group has performed in the second half of our financial year in what continues to be a challenging environment, characterised by consumer caution, geopolitical uncertainty and inflation,” comments ABF chief executive George Weston.
“Primark delivered improved trading in the UK and strong sales growth in the US, while trading on the continent was softer in a weaker consumer environment. In our food businesses, overall trading in the second half was in line with our expectations.
“This has also been a busy period strategically, including the decision to close the Vivergo bioethanol plant, the restructuring of our Spanish sugar business, and an agreement for Allied Bakeries to acquire Hovis to create a financially sustainable UK bakeries business. Against a backdrop of continued volatility in 2026, we will start to see the benefit from our recent actions and continued investment,” Mr Weston concludes.