Associated British Foods Plc (ABF.L) Tuesday reported a higher first-half profit, as revenues grew by strong trading in Primark. For the full year, the company expects strong profit growth from Primark, although not at the same level of the first half. The board declared a higher interim dividend.
The company stated that its discount retailer Primark's sales jumped 24 percent from last year, with 7 percent growth in like-for-like sales. According to the firm, trading in Primark was very strong, with much improved profit margin. The margins were benefited from lower cotton prices, better exchange rates and lower markdowns.
The Group expects the profit improvement in current financial year to be weighted towards the first half, with some modest earnings growth in the second half. With a strengthening of US dollar, the company expects to see some pressure on margins in the next financial year.
For the 24 week-period ended March 2, the firm posted pre-tax profit of 415 million pounds, higher than 329 million pounds last year. Adjusted profit before tax was 452 million pounds in recent half year.
On a per share basis, earnings increased to 38.9 pence from 31.7 pence per share in the previous year. Adjusted earnings were 41.9 pence per share in the recent period, while it was 34.4 pence per share a year ago.
Revenues climbed 10 percent to 6.33 billion pounds from 5.77 billion pounds in the same period a year ago. .
Sugar revenues increased 10 percent from the prior year. In Agriculture, revenue in the first half was 7 percent ahead of last year, driven mainly by increased cost of commodities. Grocery revenue improved 1 percent, and in Ingredients, half-yearly revenue was in line with last year.
George Weston, chief executive of the company said, "We are committed to the long-term development of our businesses through investment. These results have been achieved through a focus on generating good returns from the investments we have made over recent years."
The board has also declared an interim dividend of 9.35 pence, up 10 percent from last year, to shareholders of record on June 7, 2013, payable on July 5.
ABF.L is currently trading at 1,885 pence, up 35 pence or 1.89 percent, on a volume of 411,609 shares on the LSE.
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