Primark owner Associated British Foods (ABF) share price dips as it reports jump in revenue and profit

Primark’s parent company has reported a jump in profit and revenue in the 52 weeks to 16 September

The figures

Associated British Food’s (ABF) group revenue was up 15 per cent to £15.4bn, while adjusted operating profit rose 22 per cent to £1.36bn.

Primark sales were up 19 per cent year-on-year, rising from £5.95bn to £7.05bn, and the firm said the retailer performed “particularly well in the UK where sales were 10 per cent ahead of last year on a comparable basis and our share of the total clothing market increased significantly”.

ABF has proposed a final dividend of 29.65p, bringing the total payout for the year to 41p, an increase of 12 per cent on the previous year.

Shares dropped 1.7 per cent in early trading.

Why it’s interesting

The group warned that it will once again see the adverse effects of currency exchange movements in the first half of next year, as most UK purchases were contracted at a weaker sterling/US dollar exchange rate than the same period last year.

However, ABF said, strengthening of the euro against the US dollar in recent months will have a beneficial transaction effect on Primark’s Eurozone margins particularly in the second half of next year if these rates prevail. “With a more typical level of markdowns and the absorption of some cost increases we expect full year margins to be similar to that achieved this year,” the company said.

What ABF said

“This was a highly successful year for the group,” said George Weston, chief executive.

“These results reflect our international diversity, and the strong underlying performance of our businesses was driven by management actions throughout the year. Capital investment was a record as we continued to pursue the opportunities to grow our businesses into the future.”