Associated British Foods (AB Foods), the owner of Primark, has announced that it is well-positioned for further growth after reporting a 32% increase in full-year profit, driven by strong

performances in its Primark clothing brand and grocery division.

For the year ending September 14, AB Foods’ adjusted operating profit, the company’s preferred earnings metric, rose to £1.998 billion ($2.6 billion) from £1.51 billion in the previous year. Revenue increased by 2% to £20.1 billion.

The company expressed confidence in the outlook for its Primark brand, as well as its ingredients, agriculture, and grocery divisions. The grocery business includes well-known products such as Twinings tea, Jordans cereals, Kingsmill bread, and Ovaltine drinks.

Despite the overall positive performance, AB Foods maintained a cautious outlook on its sugar business, citing a recent decline in European sugar prices. The company expects adjusted operating profit from sugar to drop to between £50 million and £75 million in 2024/25, down from £199 million in 2023/24, with a recovery anticipated the following year.

Primark is projected to achieve mid-single-digit percentage sales growth in 2024/25, with an adjusted operating margin expected to match the 11.7% recorded in 2023/24. AB Foods highlighted significant long-term growth opportunities for Primark.

“Our long-term, patient investment strategy will yield strong returns and continue to deliver value for all stakeholders,” said CEO George Weston.

Additionally, AB Foods announced a new share buyback program worth £500 million. The company’s stock has risen by 8% over the past year. Photo by Xmate09, Wikimedia commons.