Associated British Foods (LON: ABF) shares rose at the start of Tuesday's session after the company reported a significant increase in profit for the year ended September 14, 2024.
The stock initially opened at 2,430p per share. It is currently up around 2.7% at 2,350p.
The group, which owns brands such as Primark, Twinings, and Kingsmill, saw its adjusted operating profit soar by 38% to £1.998 billion, driven by strong performances across its retail and food businesses. Profit before tax came in at £1.917 billion, up 43% year-on-year.
Primark, ABF's largest division, was a key contributor to the strong results. The discount fashion retailer reported a 51% increase in adjusted operating profit to £1.1 billion, benefiting from a recovery in margins and strong sales growth in key markets like the US, France, Spain, and Italy.
ABF's food businesses also performed well, with grocery sales up 4% and ingredients sales up 2%. However, the group warned that its sugar business would be impacted by lower European sugar prices in 2025.
The company's financial performance enabled it to increase its total dividend by 50% to 90 pence per share and announce a further £500 million share buyback program.
“This was a year of very strong financial and operational progress across the Group,” said George Weston, Chief Executive of Associated British Foods. “We delivered a substantial improvement in profitability, excellent cash generation and strong returns as a result of consistent, multi-year investment and a return to some normality in our markets and supply chains.”
Looking ahead, ABF expects mid-single-digit sales growth for Primark in 2025, driven by continued store expansion and investment in product, digital, and brand initiatives.
However, the group anticipates a significant decline in profitability for its sugar business in 2025 due to lower European sugar prices.
Searching for the Perfect Broker?
Discover our top-recommended brokers for trading and investing in financial markets. Dive in and test their capabilities with complimentary demo accounts today!
- eToro Top stock trading platform with 0% commission – Read our Review
- Admiral Markets More than 4500 stocks & over 200 ETFs available to invest in – Read our Review
- BlackBull 26,000+ Shares, Options, ETFs, Bonds, and other underlying assets – Read our Review
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY