LONDON (Reuters) -Associated British Foods said it was poised for further growth as it reported a 32% rise in full-year profit, driven by robust performances from its Primark clothing business and grocery division.
In the year to Sept. 14, the group’s adjusted operating profit, its preferred earnings measure, rose to 1.998 billion pounds ($2.6 billion) from 1.51 billion pounds in 2023/24. Revenue climbed 2% to 20.1 billion pounds.
The group said it was confident on the outlook for Primark, its ingredients and agriculture divisions, and its grocery business, which includes products such as Twinings tea, Jordans cereals, Kingsmill bread and Ovaltine drinks.
However, it reiterated its caution on its sugar business due to a recent reduction in European sugar pricing. It forecast adjusted operating profit for sugar in 2024/25 to fall to between 50 million and 75 million pounds from the 199 million pounds made in 2023/24, before recovering in the following year.
The group said Primark is targeting mid-single percentage digit sales growth in 2024/25, with adjusted operating margin in line with the 11.7% achieved in 2023/24.
It said over the medium and long term, Primark had significant opportunities to grow.
“We believe our long-term, patient investment approach will deliver strong returns and continue to create value for all stakeholders,” said CEO George Weston.
The group also announced a further share buyback programme of 500 million pounds. Its shares have risen 8% over the last year.
($1 = 0.7712 pounds)
(Reporting by James Davey; editing by Sarah Young, Sachin Ravikumar and Christina Fincher)
