Associated British Foods (ABF) on Tuesday said it overcame unseasonal weather in its latest financial year, with revenue increasing across all segments as profit followed suit.
AB Foods was one of the best-performing FTSE 100 companies on Tuesday, with shares up 7% at £22.53 this morning in London.
The food manufacturer owner of fast fashion retailer Primark said pretax profit for the year ended September 16 rose 25% to £1.34 billion from £1.08 billion the year before.
AB Foods declared a final dividend of 33.1p per share, up from 29.9p the year before, as well as a 12.7p special dividend. These brought the total financial 2023 payout to 60p per share, up 37% from 43.7p.
Revenue increased by 16% to £19.75 billion from £17.00 billion, which AB Foods said was driven by higher prices. Revenue at Primark alone rose 17% to £9.01 billion, though its adjusted operating profit decreased 2.8% to £735 million. The company said this was "much better than we expected at the start of the year when volatile inflation had threatened to disrupt consumer spending."
AB Foods added: "However, the strength of the Primark offer, and our decision to pass on only part of our input cost increases, stood us in good stead with our customers. Although unseasonal weather was a feature of our performance, particularly in the second half, trading remained generally robust."
"At the outset of this financial year the group was facing very significant economic challenges caused in part by major geopolitical events, commented chief executive George Weston. "Looking back on the year, it is clear to me that the group performed extremely well and is as a result now well positioned for the year ahead.
"Trading at Primark was excellent under the circumstances," he added.
Grocery revenue rose 12% to £4.20 billion, while Agriculture revenue increased 6.9% to £1.84 billion. Ingredients revenue increased 18% to £2.16 billion from £1.83 billion, and Sugar revenue jumped 26% to £2.55 billion.
"Profitability in our food businesses moved ahead as a result of the appeal of our products and the strength of our brands," said Weston, "both of which supported us in the recovery of high levels of input cost inflation without disrupting our customer relationships."
Going ahead, AB Foods expects "a year of meaningful progress" with strong cash generation thanks to increased profitability, "modest" like-for-like sales growth, and stability in the Grocery division "as inflation recedes". However, it cautioned that while the year to date has seen "less volatility", consumers are still facing a "challenging" environment.
