George Weston Foods, which makes bread brands like Tip Top, has seen its profits recover this year.

George Weston Foods sees profit uptick

12 November 2014

George Weston Foods has seen a strong recovery, according to its UK parent, Associated British Foods (ABF), and it's also seeking a larger slice of the local bread market.

ABF's chief executive, George Weston, said the recovery in profitability at George Weston Foods in Australia “was well established this year”.

“George Weston Foods in Australia achieved a major improvement in performance with higher bread prices, increased meat volumes, the delivery of a number of cost reduction initiatives and improved commodity procurement,” he said.

Weston also said that Tip Top had successfully implemented bread price rises in the first half of the year which, together with an increase in the proportion of higher margin products sold and further productivity improvements, led to a higher operating profit for the bakery business.

Factory productivity was also better at Don KRC which contributed to better meat yields and a reduction in labour costs, Weston said.

George Weston Foods owns the Tip Top, Burgen and Abbott's bread brands and its plan, according to Fairfax Media, is to takeover from its bakery rival, Goodman Fielder, as the market leader.

"Our ambition across Australia and New Zealand is to be the leading bakery business – if that means the market leader, we're more than happy to sign up to that," George Weston chief executive Andrew Reeves reportedly told The Australian Financial Review this week.

"Goodman Fielder is certainly the market leader in packaged bread – I'd like to think over time we could wrestle leadership in that segment."

Goodman Fielder is currently in the midst of a foreign takeover by Singapore agribusiness Wilmar and Hong-Kong investment firm First Pacific.