Associated British Foods (ABF) Shares Rallied 7.1% on FY23 Results

The Associated British Foods plc (LON: ABF) share price rallied 7.1% after releasing its financial results for the 52 weeks (financial year) ended 16 September 2023. The company reported a 16% increase in group revenues, which came in at £19,750 million compared to last year’s £16,997 million. 

The British multinational food processing and retailing company saw its adjusted profits before tax rise 9% to £1,473 million from £1,356 million in the previous year. The firm’s adjusted earnings per share rose 8% to 141.8p from last year’s 131.1p. 

ABF’s operating profit surged 17% to £1,383 million from the £1,178 million recorded in 2022. The firm’s profit before tax totalled £1,340 million, marking a 25% increase from the £1,076 million registered in 2022. The company's basic earnings per share soared 51% to 134.2p from 88.6p last year. 

The company has demonstrated robust performance in a demanding business environment, marked by significant growth in Group sales primarily driven by strategic pricing actions. Despite the challenges, the Group has exhibited resilience in achieving growth in adjusted operating profit.

Retail sales have maintained momentum, with revenues surging to £9.0 billion. This achievement was facilitated by carefully implemented selective pricing strategies and the positive reception of ABF’s product ranges. 

The company generated a free cash flow of £269 million, a result of higher profits. As a result, it just announced an additional £500 million buyback program. 

George Weston, Associated British Foods’ CEO, said: “At the outset of this financial year, the Group was facing very significant economic challenges caused in part by major geo-political events. 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. At the beginning of the year, we implemented selective price increases partially to protect profitability on the grounds that the significant input cost inflation was temporary. That careful pricing delivered as intended, with customers continuing to shop with us enthusiastically.”

ABF noted that profitability in its food business was sustained due to the significant appeal of its products and the robustness of its brands. These two factors allowed the company to recoup the high inflation levels in input costs without interfering with customer relationships. 

Associated British Foods (ABF) share price. 

The Associated British Foods (ABF) share price rallied 7.08% to trade at 2254.5p from Monday’s closing price of 2105.5p.