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AB Foods (LON:ABF), which also owns sugar, grocery, ingredients and agricultural businesses, reported annual adjusted operating profit of 1.44 billion pounds ($1.65 billion), up from 1.01 billion pounds in 2020-21, mainly reflecting higher Primark sales after the end of COVID-related restrictions.
The group also announced a 500 million pound share buyback programme and an 8% increase to its total dividend.
AB Foods, shares in which have fallen 29% this year, said in September that Primark had taken a commercial decision to limit further price increases in its 2022-23 year beyond those already planned, seeking to maintain its value credentials among consumers.
“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,” said Chief Executive George Weston.
That holding down of prices, combined with higher energy and labour costs as well as dollar strength that reduces its purchasing power, will dent Primark’s profit margin, the group said.
AB Foods expects 2022-23 profit in its grocery business, which includes Twinings tea, Jordans cereals, Kingsmill bread and Ovaltine drinks, to be broadly in line with 2021-22.
Profit in the sugar business is expected to be well ahead of 2021-22.
($1 = 0.8705 pounds)
