Final Results

Associated British Foods PLC
6 November 2001


PART 1


6 November 2001

         Associated British Foods reports robust preliminary results

             Preliminary results for year ended 15 September 2001

Highlights

  * Worldwide sales ahead at £4,434 million
  * Operating profit up 3% to £351 million *
  * Investment income up 8% to £66 million
  * Profit before tax up 5% to £393 million **
  * Adjusted earnings per share up 7% to 35.4p **
  * Dividends per share up 5% to 11.8p
  * Net cash funds up £70 million to £1,051 million

* before exceptional items and amortisation of goodwill

** before exceptional items, property profits and amortisation of goodwill



Peter Jackson, Chief Executive of Associated British Foods, said:

'These are robust results against a backdrop of difficult market conditions.
By implementing the strategies we laid down 12 months ago, we have achieved
double digit operating profit growth across four of our five business
categories. We remain committed to the generation of strong cash flow and
sustainable growth and will continue to develop our group businesses to
achieve these goals.'



For further information please contact:

Until 15:00 only

Peter Jackson, Chief Executive

John Bason, Finance Director

Geoff Lancaster, Head of External Affairs

Tel: [phone]



After 15:00 only

John Bason, Finance Director

Tel: [phone]



Jonathan Clare/Chris Barrie/Sara Batchelor, Citigate Dewe Rogerson

Tel: [phone]



ASSOCIATED BRITISH FOODS plc

PRELIMINARY ANNOUNCEMENT

FOR THE YEAR ENDED 15 SEPTEMBER 2001

                                                   For release 6 November 2001

CHAIRMAN'S STATEMENT

Against a background of growing political and economic turbulence and
weakening consumer confidence, I am pleased to report that the group operating
profit, before amortisation of goodwill and exceptional charges, increased by
3 per cent to £351 million in the year ended 15 September 2001.

At the time of the interim announcement in April I stated that a further
significant decline in the general economic climate would almost certainly
impact on our full year results. Although our companies experienced
increasingly difficult conditions, the focus on improving operational
profitability and efficiencies enabled the group to overcome adverse changes
and events in many of its markets and to achieve growth in operating profit in
the second half of the year.

Adjusting for the impact of disposals, operating profit increased by £25
million or 8 per cent over last year against a background of significant
improvement in the level of performance of most companies in the group.

Primary food and agriculture increased operating profit despite unprecedented
adverse weather conditions and the continuing impact of foot and mouth disease
and swine fever in the UK. British Sugar, although subject to a quota cut and
the abolition of its storage rebate, achieved virtually maintained profits in
the UK as a result of operational efficiencies arising from further factory
rationalisation. The outstanding results in this sector were delivered by our
overseas sugar operations in China and Poland, justifying the policy of
patiently developing our investments in these countries.

Ingredients and oils demonstrated strong growth. ACH in the US not only
achieved a satisfactory resolution of the operational problems experienced in
the prior year, but successfully integrated the acquisition of the Procter &
Gamble branded foodservice oils business into its restructured operations. The
food business of SPI Polyols had an unsatisfactory year suffering from severe
market competition, increased input costs and problems within operational
management. As with ACH last year, these problems are being addressed by a
programme of cost reduction, management restructuring and strategic
reappraisal. Abitec produced an outstanding performance in all areas of its
business. Of particular note has been the continuing growth in sales and
profit at Rohm Enzyme since its acquisition some two years ago. Towards the
end of the financial year, we agreed to acquire from Kerry Foods their UK
bakery ingredient activities which, combined with our existing business, will
give us market leadership in UK bakery ingredients.

Our grocery companies also achieved a strong increase in their profit
contribution. After a prolonged period of retrenchment in a declining market
for crispbread, Ryvita produced excellent results based on a broader product
range and sharply improved operational efficiency. Twinings continued to grow
share both in its home and overseas markets and a particularly pleasing
feature of this success has been the growth in its share of the green tea and
the herbal and fruit tea infusion markets.

Primark maintained its strong growth in sales and profit. We continue to
invest heavily in new stores and the associated pre-opening costs have been
charged in these results. By the end of the calendar year 2001 we expect to be
trading from 114 stores with a sales area of almost 2 million square feet.
Primark has now achieved national recognition as one of the leading chains in
UK and Irish textile retailing.

Against this background of improvement in nearly every area of our business,
it is disappointing to have to record a significant fall in the contribution
from our Australian subsidiary, George Weston Foods. Despite a strong
performance by milling and baking in Australia, other divisions of this group
recorded sharply lower profits. This result, following the unsatisfactory
performance of the last few years, is unacceptable. Major changes have already
taken place at the senior management level which, combined with a closely
monitored cost reduction programme, lead us to expect an improved profit
performance as the current year progresses.

The process of concentrating our activities and investment into more focused
areas has generated additional profit and cash. The sale of surplus properties
generated a profit of £20 million and the disposal of Burton's and a number of
smaller businesses resulted in a net exceptional profit of £17 million. At the
same time we have reviewed the carrying value of the intangible assets in SPI
and have written down the goodwill arising on this investment by an additional
£62 million in the accounts.

Despite a difficult investment climate and declining interest rates,
investment income at £66 million was up 8 per cent, whilst interest payable
declined by £2 million to £24 million. Group profit before tax, adjusted to
exclude exceptional items, property profits and amortisation of goodwill
increased 5 per cent to £393 million from £375 million. Adjusted earnings per
share were ahead by 7 per cent to 35.4p.

The solid performance of your company against such an adverse background is
gratifying. In last year's Chairman's statement I reported that we were taking
major steps to improve the focus of our traditional businesses. I believe that
this year's results indicate that we have taken significant strides towards
achieving that objective. But this is a programme which must continue if the
company is to compete and thrive in the very challenging environments in which
it operates.

The year ahead poses fresh challenges. In the primary food and agriculture
sector, current UK crop forecasts are for significantly lower harvests of
sugar beet and other arable crops. Efforts to eliminate foot and mouth disease
are only now proving to be fully effective.

The last week of our financial year witnessed the devastation in the US
brought about by the terrorist hijacking of four commercial air flights. The
impact of those terrible acts on an already fragile world economy has led to
escalating uncertainty and a reduction in consumer confidence. The effects of
these events have been widespread throughout much of the global economy. The
contraction in demand which is now being experienced has resulted in a
significant number of corporate retrenchments. It is likely that, as companies
cut back on new investment and reduce workforces, consumer confidence will be
further dented.

Spending on new acquisitions in the past year at £121 million has been limited
to the purchase of businesses which fit with our existing core activities.
They offer superior long-term returns and enhance our existing operations.

However, the will to invest in larger strategic acquisitions in areas where we
wish to grow is not lacking. In the past year we have reviewed potential
targets and engaged in discussion with vendors and intermediaries on a number
of occasions. Our investment criteria and rigorous due diligence have resulted
in our not pursuing these targets. Even where an acquisition affords strategic
advantages, it must still offer the prospect of adding economic value for our
shareholders in the foreseeable future and over the long-term.

Our company is well placed to meet the challenges which lie ahead. We have
leading market positions in staple industries and generate a strong and
positive cash flow backed by deep financial resources.

We intend to maintain our commitment to improved profit and management
performance. Our budgets for the coming year call for further growth in sales
and profit. Our confidence in achieving our targets is only qualified by the
potential for external events to impact on our operations.

Dividends

The directors have declared a second interim dividend of 7.55p (2000 - 7.0p)
which will be paid on

18 February 2002 to shareholders registered at the close of business on 18
January 2002. This makes a total dividend for the year of 11.80p, an increase
of 5 per cent on the previous year.

Employees

We are operating in a very challenging environment where the need for change
is constant and a flexible approach to capitalise on the opportunities
presented is essential. My thanks go to all our employees around the world for
rising to these challenges and for their valuable contribution to our success.



Harry Bailey

Chairman



CHIEF EXECUTIVE'S REPORT

During the year businesses across the group delivered excellent results as we
implemented strategies that we committed to 12 months ago. Sales for the group
increased to £4,434 million and operating profit, before exceptional items and
amortisation of goodwill, increased 3% to £351 million. If the results of
businesses disposed of during the year are excluded, sales actually increased
by 6% to £4,338 million and adjusted operating profit increased 8% to £350
million.

A measure of this improvement is illustrated in the new segmental analysis
included in this report which shows that four out of five of our business
categories have delivered operating profit increases of 10% and more. This
reflects the strength and depth of our business as well as the benefits of
market and geographic diversification.

There are still issues to be worked on. We must continue to build on our
management strengths. We must continue the development and, where necessary,
the streamlining of our portfolio of businesses and continue to tackle those
issues that will crop up to challenge us in any one year. This year, these
have ranged from steep increases in energy prices in the US through to major
livestock diseases affecting our UK agricultural businesses and they are
covered in more detail later in this report. Whenever challenges arise they
will be assessed, tackled and the business moved forward.

As we stated last year, our twin goals for the future are strong cash flow and
sustainable growth. The cash flow qualities of your business are well
established. They have been demonstrated again this year and are expected to
continue in years to come.

To achieve our growth requirements we needed to restructure our management
team, dispose of businesses where appropriate, invest and restructure our
retained businesses where necessary and acquire new businesses to enhance
future earnings where possible.

The management restructuring that we announced at the beginning of the year
has worked well, bringing improved focus, a better application of expertise
and, in a number of instances, new management teams with a better blend of
internally developed and externally recruited people.

Six businesses were sold during the year for a total consideration of £170
million, of which £142 million was received during the year. These businesses
were sold because we did not believe they could contribute to the achievement
of our goals. Whilst we will continue to assess our portfolio, those companies
that remain in our group are capable of delivering results that fully support
our future direction.

A number of these companies however required restructuring and investment.
Last year we announced our intention to restructure Allied Bakeries, Allied
Mills and ACH. These major projects have been implemented on time and in line
with budget. At the same time, British Sugar announced a major appraisal of
its manufacturing assets which has resulted in the closure of two factories
during the past year and the announcement of a further closure at
Kidderminster during the coming year.

A major benefit of the strong cash flow characteristics of our group is that
we can invest heavily behind good, business-enhancing proposals. This year has
seen us invest £212 million in capital projects including a major
technological advance at British Sugar and further store openings for Primark,
our excellent clothes retailing operation.

Primark's success has been a key contributor to the strong 6% increase in the
sales of our continuing companies. Major steps forward in product innovation
and marketing across a wide range of our businesses are showing results.
Action is being taken to further reinforce this work.

We have referred on occasion to our desire to make acquisitions that will
enhance the medium to long-term returns to shareholders. Our commitment to
search out the right acquisitions is high and the resources dedicated to the
search for and review of such opportunities have been increased. Nevertheless
we have refused to complete transactions where the price has been such that
our investment criteria cannot be met in appropriate time scales. We will
continue to search and believe that in time our searches will be successful.
Our reviews will however continue to be thorough and measured.

The following pages review our businesses in more detail. Much has been
achieved in the last year and, despite the economic uncertainties, a firm
foundation is in place for further significant improvement over the coming
years.

PRIMARY FOOD AND AGRICULTURE

Associated British Foods is UK agriculture's biggest customer. The company
buys more primary products from British farmers than any other group, adding
value through its sophisticated and efficient processing facilities to produce
high quality, staple food ingredients such as flour and sugar.

Our primary food group, which includes the UK flour mills and our worldwide
sugar and seed enhancement businesses, has had a year of successful
restructuring with profits boosted by significant growth in our Polish and
Chinese sugar operations.

In the UK the profit at British Sugar was affected by the £10 million
rationalisation cost taken for the closure of three factories. A lower sugar
crop, higher energy costs and a one-time levy payment on quota stocks held at
30 June also impacted profitability. 1.325 million tonnes of sugar was
processed which, although comfortably in excess of quota, was down on last
year. However, the high quality of the crop, the skill of the growers in
harvesting in extremely wet conditions and excellent factory performances
mostly offset the effect of higher costs. The effect of the exchange rate of
the euro to sterling on the institutional sugar price was minimal year on
year. The factories at Ipswich and Bardney were closed and work has proceeded
with the expansion of the Allscott factory in the West Midlands in preparation
for the closure of Kidderminster after the campaign next year. The £25 million
investment in resin separation process technology at our Wissington factory is
well advanced and due for commissioning next spring.

High gas prices and low electricity selling prices, coupled with unfavourable
conditions brought about by the introduction of new electricity trading
arrangements, have reduced the profitability of our combined heat and power
plants and there are currently no plans for further developments in this area.
We believe we can make a significant contribution to the UK Government's
aspirations for green energy production and we continue to discuss with them
ways in which barriers to our further investment can be removed.

Changes to the European sugar regime announced by the Commission saw the end
of the rebate scheme which contributed towards the financing of quota sugar
stocks. This resulted in a one-time cost in respect of quota sugar stocks held
at 30 June and in future the full financing of stocks will become the
responsibility of the market. The Commission also confirmed that the
fundamental arrangements governing the sugar regime would stay in place until
2006 with a review scheduled for 2003 in preparation for any reforms which
would start to take effect from 2006.

Strong growth was achieved in our Polish and Chinese sugar operations. In
Poland we benefited from stable pricing, a good crop and excellent performance
from our factories. The acquisition of four further factories, making the
total ten, saw our total production rise to 11% of the domestic market. In
China we benefited from stronger sugar prices. The Huaiyuan factory was
acquired in September last year and since the year end we acquired Wuxuan, our
fourth factory in Guangxi Province, taking our total Chinese cane sugar
production to over 300,000 tonnes.

The Germains Technology Group retains a leading market position in the seed
treatment and coating sector. Its technology in seed pelleting provides
optimum germination from each individual seed and reduces the need for
externally applied fertilisers and sprays. There has been pressure on volumes
and margins over the years in its traditional sugar beet sector and it has
successfully diversified both geographically and its product sectors.

Allied Mills continued to operate in a highly competitive flour milling
market. This year administration has been centralised to improve service
levels and reduce costs and the Uxbridge mill has been closed. Further
investment was made in our semolina milling operations in Tilbury with the
addition of a packing plant and warehouse which will be operational in March
next year. The likelihood of a poor wheat harvest following adverse weather
conditions last spring has resulted in increased wheat prices and, in
September, led to the announcement of the first increase in flour prices in
five years.

Our agriculture group, ABNA, includes animal feeds, grain trading and
speciality crop production. The UK animal feeds business increased profit and
its share of the poultry and pig markets. The business benefited from the
integration of Fishers and ABN which resulted in the closure of the Cranswick
mill, the centralisation of raw material buying, laboratory services, quality
control, finance and administration. The business has proved resilient and
resourceful despite the wettest autumn for over 100 years, animal diseases
affecting its pig, sheep, cattle and dairy sector customers and the
requirement to comply with new legislation and assurance schemes. New products
continue to present opportunities including a major contract in the ruminant
sector for certified non-GM product and new offerings from Trident. Such
initiatives have been supported since this summer by Clickagri.com, an
internet portal dedicated to the agricultural industry. It serves as a
business-to-business hub for the group's merchant and farmer customers and has
streamlined the sales order and administration process.

Despite a reduction in the seed and fertiliser markets as a result of the poor
weather early in the year, Allied Grain maintained volume and significantly
increased its market share. John K King's expertise in contract growing of
high value speciality crops yielded strong profit growth. The performance of
the Lincoln oil extraction plant has exceeded expectations and led to an
expansion of capacity this year. Progress has been made in developing sales in
the US market and a joint venture with ACH will help in the development of
speciality oil sales in that market.

INGREDIENTS AND OILS

The group is increasingly focusing on high added value ingredients and
vegetable oils. It applies its skills in producing functional ingredients from
natural products which are widely used in the food, foodservice,
pharmaceutical and personal care sectors.

Strong growth during the year in ingredients and oils was demonstrated by
sales up 11% to £711 million and profit up 31% to £42 million.

The rationalisation announced last year by ACH Food Companies, our US oils
business, was successfully accomplished during the year. The closure of
Columbus, Ohio was completed and production was transferred to Jacksonville
and Champaign, Illinois. The Champaign factory has been extensively
re-configured following the withdrawal from refining and bleaching and its
outsourcing to Archer Daniels Midland. In January we announced that white rice
production would cease at the Greenville, Mississippi rice mill and at the
year end the mill was sold. The branded foodservice shortenings and oils
business acquired from Procter & Gamble in January has been fully integrated
and foodservice is now the largest profit contributor to the business. ACH is
now the clear market leader in premium branded oils to the foodservice sector
and the increased breadth of distribution gained through this acquisition
presents exciting opportunities for other ACH product lines.

Abitec, a major part of our international speciality ingredients business,
experienced strong profit growth driven by sales and margin improvements. In
the UK all the bakery ingredients interests have been brought together to
create a focused group capable of supplying a full range of products to all
sectors of the trade and positions Abitec as the commercial and technical
leader in this sector. A similar rationalisation of our bakery ingredient
interests is planned for the US where a demand for national suppliers with a
full range of products is being driven by consolidation among the country's
leading bakery groups.

Abitec's lipid technology business achieved a solid performance as a result of
an improvement in product mix. In Europe we continue to benefit from the
introduction of more profitable lines developed by us in the US. Detailed
attention to margins in a tight market, alongside recent investment, has
increased profitability in our UK food emulsifier business.

Our enzymes business continues to perform strongly. It is driving its sales
and profit growth with a vigorous research and development programme and is
introducing products in sectors outside its traditional bakery markets, such
as animal feed and textiles. Supported by patent protection these new products
will secure profits growth in the years to come. A new headquarters and
development centre in Germany will be opened this autumn.

We sold AB Coatings, our fledgling food coatings business, and Nelson's, our
jam and preserves business, because we believed that they could not contribute
to our long term goals.

SPI, our US based polyols operation, has faced challenges arising from
oversupply in the sorbitol market and increased costs of operation arising
from higher energy prices and maintenance costs. Despite higher volumes,
profits in the food business were well down on last year as a result. The
senior management team has now been restructured, a cost reduction programme
is well underway and business building opportunities are being pursued.

SPI Pharma saw an increase in its share of the antacid market this year and
continues to develop its capabilities in the supply of highly engineered
ingredients to the pharmaceutical industry. The launch of Pharmaguma is
promising. This provides a chewable delivery system for pharmaceutical and
nutraceutical products and since it can be directly compressed into tablets it
offers production cost advantages over traditional competitive products.

GROCERY

Associated British Foods is a major UK manufacturer of both branded and
private label grocery products, many of which are household names.

The profitability of our Grocery businesses improved sharply this year with
profit up 28% to £37 million and sales up 1% to £858 million. Good
performances from Allied Bakeries, Ryvita, Silver Spoon and Twinings more than
offset lower profit at Speedibake and Westmill.

Prices remained under pressure for Allied Bakeries but the lower gross margins
were offset by cost reduction and efficiency improvements. The bakery closure
programme announced last year has been completed and the subsequent review of
distribution operations resulted in the closure of five depots during the
year. Strong brand and product development continued and Kingsmill now
features strongly in the top ten of UK food grocery brands. The latest range
extension, 'Whole White', which was launched in July, is proving successful.
We continue to build relationships with the major retailers with a focus on
service and this was recognised in the award for best bakery own label
supplier by the Grocer magazine. The opening of our Innovation Centre, as the
centre of excellence in product and commercial development, will stimulate
creativity and maintain our reputation for market leading initiatives.

Speedibake has grown sales volumes in an increasingly competitive market.
Costs and efficiency will be improved by the closure of Northampton and
increased investment in new and improved facilities at its two sites in
Yorkshire. Investment in new state-of-the-art production facilities for
speciality continental breads will allow the cutting, shaping and dressing of
the dough to virtually any shape, size or specification, and the delivery of
an authentic taste and texture from a real stone oven.

Strong profit growth was enjoyed at Ryvita with sales growth at home and
overseas together with reduced costs. The seeded and sweet varieties of
crispbread increased share of the home market. The growth in export sales was
led by Germany, Austria and the US where we captured the market leading
position for crispbread in the health sector. Waste management teams in the
factories have achieved a reduction in ingredient use and better product
quality. The maize mill achieved organic accreditation this year and we now
sell organic flour and grains.

Silver Spoon continued to demonstrate its market leadership and innovation in
the retail sugar and sweeteners market. Volumes were maintained and our share
in the multiple grocers market grew again, supported by the interest in the
sector generated by some exciting range extensions and market support
activity. Treat, our ice cream toppings range, added 'Monster Crackin' which
is a chocolate topping that sets hard on ice cream. The whole range was
refreshed with new packaging and point of sale material. Our new artificial
sweetener, 'Nothing Comes Closer to Sugar' was advertised on television from
January this year and has now exceeded the market share target set at launch,
attaining number two spot in the new generation sweeteners sector. In
foodservice, stock syrup was successfully launched and offers chefs quality
product, consistency and saves them time.

Twinings, one of the oldest and most internationally recognised brands in the
world, achieved strong sales and profits increased over last year. We
continued to dominate the UK market for speciality and herbal teas. Export
sales were strong to most markets and the US made good progress with the
relaunch of green teas and a redesign of the classic black tea varieties.
Consumption of green teas continues to grow in health conscious markets and
Twinings leads this sector in a number of major areas. The new,
ready-to-drink, chilled teas are growing strongly and will develop into new
markets and flavours with promotional support in the coming year. The UK
packaging will be relaunched this autumn with a design which combines the
traditional, much loved, Twinings brand values with a more modern image.

RETAIL & PACKAGING

Primark's formula of providing quality merchandise at affordable prices has
provided a retail success story for Associated British Foods. Allied Glass
Containers is one of Europe's leading producers of premium glass packaging.

PRIMARK

Progress at Primark, our textile retailing chain, has again been very
encouraging and we continue to back the success of its retail formula with
investment in a vigorous new store opening programme. Sales increased 20% to £
515 million and profit increased 18% to £60 million. On a like-for-like basis
sales increased 6% over last year.

15 new stores were opened during the year taking the total number of stores
from 93 at the start of the year to 108 at the year end. The retail selling
space was increased from 1.4 million square feet to 1.75 million square feet.
In addition six stores had been acquired and are scheduled to be opened before
the end of this calendar year and will increase the selling space to 2 million
square feet.

The complete withdrawal of C&A from the UK high street provided an excellent
opportunity for Primark to acquire prime sites in city centres not previously
served. 12 stores were finally acquired and 11 of these were refitted and
opened during the year. Two further stores were opened in England, in Barnsley
with 24,000 square feet of selling space at the beginning of the year and in
Norwich city centre with 30,000 square feet at the year end.

The successful opening in November 2000 of the Newcastle store was a landmark
in our progress with over 40,000 square feet in a city centre location.
However, the Manchester store was opened in October this year and has become
the flagship. This store is in a prime location, covers 70,000 square feet,
and becomes easily our largest site. The Manchester store also launches
Primark's new store format which will be progressively rolled out across new
and refurbished stores. The new format has been developed following extensive
research and a successful trial of elements in the new Norwich store.

We opened new stores in Newtownabbey and Newry in Northern Ireland and, after
the year end, Blanchardstown, west of Dublin, was opened in October. Other
stores due to open shortly are in Lewisham, Glasgow, Torquay and another
location in Wandsworth.

With many major towns and cities in the UK still unserved, Primark's expansion
will continue, limited only by the availability of sites suitable for our
successful formula.

This rapid growth has required a strategic review of our distribution
arrangements to ensure costs are minimised and service levels optimised. As a
result a 400,000 square feet distribution centre has been constructed at Magna
Park which is strategically located in Lutterworth, Leicestershire. The new
centre has taken over logistics for the UK from the former, and much smaller,
Coventry site and has the capacity to support Primark's rapidly expanding
network. In Ireland the opportunity has been taken to consolidate distribution
into one centre.

ALLIED GLASS CONTAINERS

Sales increased 7% to £59 million and profits were ahead at Allied Glass
Containers despite a highly competitive market. Higher raw material and energy
costs and lower prices were more than offset by higher volume, an improved
product mix and higher operating efficiency in the factories.

Capital expenditure has been targeted at productivity and quality
improvements, including the commissioning of leading edge automated vision
inspection equipment at the Leeds factory. This removes the need for manual
inspection of products on all lines.

This business coordinates the group's compliance with European Packaging Waste
regulations. It recycles 40,000 tonnes of glass from bottle banks and both
factories received accreditation to the ISO 14001 environmental standard this
year. They are already registered to the ISO 9001 Quality standard and the
Royal Society of Health hygiene standard.

AUSTRALIA & NEW ZEALAND

George Weston Foods is a major processor and producer of primary and branded
food products in Australia and New Zealand.

The year was extremely challenging for George Weston Foods. Sales increased 3%
in local currency, but accounting for a 7% decline in the value of the
Australian dollar, sales in sterling declined 4% to £583 million. Major
increases in input costs, particularly wheat, meat and energy, which were not
recovered in selling prices, and restructuring costs in some businesses
resulted in a profit fall from £31 million to £19 million.

The milling and baking business performed well in the year and increased
profits. Wheat prices increased sharply earlier in the year following poor
weather, particularly in New South Wales. This reduced margins in the milling
business which were later recovered with flour price increases. The baking
business had a number of product innovations and strong marketing initiatives
during the year. Of particular note was the introduction of Noble Rise 'Tasty
Crust', which uses proprietary packaging and flavour technology to offer
consumers bread that is crusty on top and soft in the middle. Through the
successful expansion of the Noble Rise range, the baking business has
strengthened its already strong position in the premium bread market. The Tip
Top and Sunblest brands were supported with very successful television
advertising.

The biscuit business saw its volumes fall this year and the loss of
contribution combined with the effect of increased flour prices reduced
profits. The Quatro biscuit range was successfully extended with the launch of
the hazelnut variety.

Increased meat prices, and cost and service inefficiencies arising from the
transfer of meat processing from Chapman's at Nairne to Don's in Melbourne,
resulted in a decline in the profitability of the meat and dairy business. The
new management team is now focusing on cost reductions and improvements in the
service levels at Don's. In light of the deregulation of the dairy industry a
decision was taken to sell the Capel dairy to a local farming cooperative.

The starch business suffered a reduction in profit as a result of reduced
volume and low factory yields.

There was progress in the rebuilding and strengthening of the business
management teams this year. New chief executives were appointed in the meat
and dairy, biscuit and cake and bioproducts businesses, with new sales and
marketing teams in place in biscuit and cake and meat and dairy. In addition,
a business improvement programme has been introduced which has already
delivered savings resulting from reduced duplication, benefits in procurement
and improved distribution.

George Weston Foods continued to be a major contributor to the Australian
community and culture with its sponsorship of a range of events and charities.

While the year just passed was a difficult one, our strategy in Australia of
cost reduction and improving our market position through the introduction of
new products and services leads us to expect an improvement in profitability
as the current year progresses.

SUMMARY

These are robust results against a backdrop of difficult market conditions. By
implementing the strategies we laid down 12 months ago, we have achieved
double digit operating profit growth across four of our five business
categories. We remain committed to the generation of strong cash flow and
sustainable growth and will continue to develop our group businesses to
achieve these goals.



Peter Jackson

Chief Executive



FINANCE DIRECTOR'S REPORT

GROUP PERFORMANCE

Sales for the group including its share of joint ventures increased £20
million to £4,434 million. Adjusting for the disposal of businesses, sales
increased by 6% to £4,338 million.

Operating profit before the amortisation of goodwill and exceptional items
increased by 3%, or £11 million, to £351 million. Adjusting for the disposal
of businesses, operating profit increased by 8%, from £325 million to £350
million.

More comprehensive disclosure of the results by business has been provided
this year and is included in an expanded segmental analysis in the notes to
the accounts. Business segment operating profits include a pension charge that
reflects the regular cost. The difference between this charge and that
required under SSAP24 is shown as a credit held centrally. Central costs are
those incurred in the group's head office, including treasury, property and
insurance. These costs for 2000 were reduced by income related to rents on
properties which have now been sold.

In light of the poor performance by the food business of SPI, our US polyols
business, we have reviewed the carrying value of the assets of this business
and have written off £62 million of intangible fixed assets. This has been
disclosed as an exceptional goodwill charge in the accounts.

In October 2000, we sold Burton's, the UK biscuit and sugar confectionery
business, Rowallan, an industrial fats business, and the pig business of ABN.
Just before the year end we concluded negotiations for the sale of Nelsons of
Aintree, the jams and preserves business, and the ACH rice processing business
at Greenville, Mississippi. These disposals generated a total consideration of
£170 million, of which £142 million was received during the year, and a net
exceptional profit of £17 million after the write off of £6 million of
goodwill.

In January 2001, ACH completed the acquisition of the branded foodservice oil
business from Procter & Gamble in the US. We also acquired four sugar
factories in Poland, the Huaiyuan sugar mill in China and three Scandinavian
distribution businesses for Twinings. The total acquisition spend in the year
was £121 million.

Investment income increased from £61 million in 2000 to £66 million this year.
This reflects the higher level of funds available for investment, through
internal cash generation and the net proceeds from acquisition and disposal
activity, which more than offset the impact of a slightly lower average
interest rate this year compared to last year. We continued to dispose of
former retail bakery properties that are no longer operated by the group and
this increased the profit on the sale of properties from £8 million to £20
million.

Profit before tax increased from £247 million to £357 million. Adjusted to
exclude exceptional items, property profits and the amortisation of goodwill,
profit before tax increased 5% from £375 million to £393 million.

TAXATION

The tax charge of £106 million represents an underlying effective tax rate of
27.0% on the adjusted profit before tax and compares with 29.6% in 2000. This
reduction can be attributed principally to lower tax rates in some overseas
jurisdictions, lower profits earned in countries with higher tax rates and
relief on amortisation of goodwill on the recent asset acquisitions in the US.
No tax relief is available on the amortisation of goodwill elsewhere and the
use of capital losses has sheltered the capital gains on property and business
disposals.

EARNINGS AND DIVIDENDS

Earnings increased by £105 million to £243 million and the weighted average
number of shares in issue remained constant at 789 million. Earnings per
ordinary share increased from 17.5p to 30.8p. However, after adjusting for
exceptional items, the property profits and amortisation of goodwill, earnings
per share increased by 7% from 33.1p to 35.4p. The first interim dividend was
maintained at 4.25p and a second interim dividend has been declared at 7.55p
which represents an overall increase of 5% for the year. Dividends will cost a
total of £93 million. Dividend cover, on an adjusted basis, is 3.0 times (2000
- 2.9 times). £150 million will be transferred to reserves.

BALANCE SHEET

Fixed assets declined by £40 million to £1,607 million with additions from
capital expenditure and acquisitions being more than offset by depreciation,
disposals, foreign exchange movements and the exceptional amortisation of
goodwill. Net cash funds, being current asset investments and cash at bank
less short term borrowings and loans, increased by £70 million to £1,051
million reflecting the cash generated by the group in the year. Working
capital, including tax and dividend accruals, increased by £61 million mainly
as a result of a lower tax accrual and the timing of year end trade payments
and receipts. Provisions reduced mainly as a result of the payment of the £27
million European Commission fine levied on British Sugar for an infringement
of competition law prior to its acquisition by the group. As a result the
group's net assets increased by £115 million to £2,956 million.

A currency loss of £44 million arose on the translation into sterling of the
group's non-sterling net assets principally in Australia and the US.

Return on capital employed, defined as the operating profit before exceptional
items and goodwill expressed as a percentage of year end capital employed,
improved from 18.2% to 18.5% for the continuing businesses of the group.
Strong profit and margin improvements were made in primary food and
agriculture, ingredients and oils and grocery. These more than offset the
reduced return in Australia and a lower return in Primark where the
significant capital investment late in the year will generate a full return
next year.

CASH FLOW

Net cash flow from operating activities was £427 million, £18 million lower
than last year, with the increased profit before depreciation and amortisation
of goodwill being more than offset by a working capital increase.

Capital expenditure during the year was £212 million of which £68 million was
spent on the acquisition or refitting of Primark stores and the balance was
used principally to upgrade, modernise and expand existing manufacturing
facilities.

The net proceeds from disposals less spend on acquisitions amounted to £21
million.

TREASURY POLICY AND CONTROLS

The group's cash and current asset investments totalled £1,290 million at the
year end including some £896 million placed with professional investment
managers who have full discretion to act within closely monitored and agreed
guidelines.

The investment objective is to preserve the underlying assets, whilst
achieving a satisfactory return. The investment guidelines are kept under
constant review with the objective of monitoring and controlling risk levels.
The guidelines require that investments must carry a minimum credit rating of
AA- and also set down conditions relating to sovereign risk, length of
maturity, exchange rate exposure and type of investment instrument. Aggregate
limits for each category of investment and risk exposure are set for each
manager.

The group's UK cash balances are managed by a central treasury department
operating under strictly controlled guidelines, which also arranges term bank
finance, as and when necessary, to finance short term working capital
requirements particularly for the sugar beet and wheat harvests.

Futures contracts used as hedges in commodity trading operations are tightly
controlled within set limits and transactions of a speculative nature are not
undertaken.

FOREIGN CURRENCY

The businesses operate mainly in their local currency and as a result the
group's transaction exposure to exchange rate movements is minimal.
Significant cross-border transactions are covered by forward purchases and
sales of foreign currency, or foreign currency options as appropriate.

The group does not hedge the translation effect of exchange rate movements on
the profit and loss account. The group regards its interest in its overseas
subsidiary undertakings as long term investments and does not hedge the
translation effect of exchange rate movements on them.

FINANCIAL REPORTING STANDARDS AND ACCOUNTING POLICIES

Three new financial reporting standards have been issued during the year:

FRS 17 - 'Retirement Benefits', requires additional disclosures to be made
this year in respect of the closing balance sheet. Full adoption of the
standard is not required until the year ending September 2003.

FRS 18 - 'Accounting Policies', has been adopted and imposes no new
obligations on the group.

FRS 19 - 'Deferred Tax', has the effect of replacing the partial provision
method of accounting for deferred tax required by SSAP 15 with full provision.
This standard will be adopted in the accounts for the year ending September
2002.

There have been no changes to the group's accounting policies from the
previous year.



John Bason

Finance Director
                   
The annual report and accounts will be available on 9 November 2001 and the
annual general meeting will be held at The Royal Garden Hotel, London at 11am
on Friday 7 December 2001.


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