Associated British Foods plc results for the 24 weeks ended 4 March 2023
Strong growth in Group sales
Very good footfall and margin better than expected at Primark
Financial Headlines
| Actual currency | Constant currency | ||
| change | change | ||
| Group revenue | £9,560m | +21% | +17% |
| Adjusted operating profit | £684m | -3% | -7% |
| Adjusted profit before tax | £667m | In line | |
| Adjusted earnings per share | 62.0p | -3% | |
| Dividend per share | 14.2p | +3% | |
| Gross investment | £527m | +17% | |
| Net cash before lease liabilities | £586m | ||
| Net debt including lease liabilities | £2,601m | ||
| Statutory operating profit | £663m | -3% | |
| Statutory profit before tax | £644m | +1% | |
| Basic earnings per share | 67.0p | +11% |
Statutory operating profit is derived from the adjusted operating profit after taking certain charges and credits as shown on the face of the condensed consolidated income statement.
Summary of Group performance
Food
| â— | Sales increased across all businesses, up 23% in aggregate to £5,332m |
| â— | Adjusted operating profit up 13% to £373m |
| â— | Exceptionally strong adjusted operating profit performance in Ingredients, up 62% |
| â— | Sugar crop and inflationary challenges offset by strong Illovo performance |
| â— | Grocery adjusted operating profit broadly in line with pricing lagging input cost inflation as expected |
| â— | Agriculture adjusted operating profit down with difficult animal feed markets in UK and China |
Primark
| â— | Sales up 19% to £4,228m reflecting good growth in all countries |
| â— | Strong like-for-like sales growth driven by price and volume |
| â— | New stores performing strongly |
| â— | Adjusted operating profit of £351m, margin of 8.3% |
| â— | US: expansion into southern states to be anchored by new warehouse |
| â— | Announcement of restructuring and growth plan for Germany |
| â— | Digital development continues with rollout of improved website, UK trial of Click and Collect launched with geographic extension later this year |
Shareholder returns
| â— | £140m of the £500m share buyback completed in the period |
George Weston, Chief Executive of Associated British Foods, said:
“This period was marked by extreme and volatile inflation in all our businesses. We have taken considerable action to mitigate these costs through operational cost savings and, where appropriate, pricing.
The performance of our Food businesses was resilient in aggregate, underpinned by an exceptional performance at Ingredients. We were very pleased with the improvement in Primark sales, which recovered strongly from the second half of the last financial year and drove operating profit margin up to 8.3%, higher than we had expected.
Primark has been very successful in this period in attracting new customers with its proposition of good quality merchandise combined with price leadership and well invested stores. We have had a very strong contribution from new stores opened in the period, and today we are announcing plans for the development of our Primark business in southern states of the US.”
The Group has defined and outlined the purpose of its Alternative performance measures in note 14. These measures are used within the Financial Headlines and in this Interim Results Announcement.