The Primark parent company AB Foods wants its shareholders to participate in the good business of the past few months. Associated British Foods announced on Tuesday in London that shares worth 500 million pounds (577 million euros) will be bought back again in the new financial year.
The group had recently completed a program with the same volume. For the 2022/2023 financial year ending September 16, AB Foods also wants to pay a dividend of a total of 60 pence per share (including special dividend), after 43.7 pence a year earlier. The group has performed better in recent months than the market expected.
The shares of AB Foods rose to their highest level since the summer of 2021, with an increase of more than seven percent at times. At midday they were still trading a good six percent higher, which meant first place in the British leading index FTSE 100.
Analyst Richard Chamberlain from the Canadian bank RBC wrote in an initial reaction that the business figures were rather mixed, but the planned distributions and share buybacks were positive. The profit margin outlook for Primark is also encouraging.
In the past financial year, as already known, sales increased by 15 percent after adjusting for currency effects to 19.75 billion pounds. Operating profit adjusted for special items increased by 5 percent to 1.5 billion pounds. In both metrics, the group slightly exceeded the expectations of analysts surveyed by the Bloomberg news agency. The bottom line is that AB Foods earned over a billion pounds.
Management sees the group as well positioned for the 2023/2024 financial year. Inflationary pressure has eased and volatility is lower than a year ago, it said. Lower tax payments and pension contributions should also free up cash to make planned investments.
The group expects more sales for the low-cost fashion chain Primark. In addition, thanks to lower production and freight costs, a margin of over 10 percent adjusted for special effects should be earned here, it said. In the food business, however, the group only expects a stable result given falling inflation and planned marketing costs.(dpa)