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Associated British Foods PLC posted an annual earnings surge and said like-for-like sales at its Primark Stores Ltd high street retail chain in the UK are now in-line with pre-virus levels as it launched a buyback programme.
AB Foods said revenue for the financial year that ended September 17 climbed 22% to £17.00 billion from £13.88 billion a year prior. Pretax profit jumped 48% to £1.08 billion from £725 million. Operating costs rose 21% to £15.73 billion from £13.00 billion.
"Group revenue and profit were much stronger this year than last, demonstrating that our businesses have emerged robustly from the disruption of the pandemic. But just as we began to experience a more normal operating environment, we encountered the most challenging economic conditions for many years with sharply rising and broadly based inflation, as well as highly volatile input costs and exchange rates. We estimate that inflation increased costs across the group by some £1 billion in this year alone," said Chair Michael McLintock.
AB Foods upped its payout by 7.9% to 43.7 pence from 40.5p. In addition, it announced a £500 million buyback programme to be completed in the current financial year.
At Primark, annual sales totalled £7.7 billion, up 43% at constant currency.
"UK like-for-like sales and market shares now broadly in line with pre-Covid levels," AB Foods said on Primark.
Primark is facing rampant cost inflation, however.
AB Foods Chief Executive George Weston said: "We have decided to hold prices for the new financial year at the levels already implemented and planned and to stand by our customers, rather than set pricing against these highly volatile input costs and exchange rates. As a result, in the current financial year, we expect significant growth in group sales from pricing in Food, as well as from some pricing and from space expansion at Primark. Our outlook remains unchanged. We continue to expect group adjusted operating profit and adjusted earnings per share to be lower than the financial year just closed."
The firm added that its outlook for the full year remains unchanged, continuing to expect "significant" growth in sales, while adjusted operating profit and adjusted earnings per share are expected to be lower than in the just posted financial year 2022.
AB Foods shares were 5.1% higher at 1,501.00 pence each in London on Tuesday morning.
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