ASBFY Associated British Foods Plc (PK)

By Michael Susin

Associated British Foods PLC said Tuesday that it is launching a buyback program and raised its dividend payout after reporting a rise in pretax profit increase for fiscal 2022, driven by increased pricing.

The British conglomerate, which owns the Primark fashion retailer, said it will launch a 500 million-pound ($575.7 million) share buyback program to be completed in fiscal 2023. It also increased its final dividend to 29.9 pence a share, bringing the total dividend to 43.7 pence a share and compared with a total payout of 40.5 pence a share a year prior.

The company said it made a pretax profit for the year ended Sept. 17 of GBP1.08 billion, up from GBP725 million in fiscal 2021.

Adjusted operating profit--the company's preferred metric, which strips out exceptional and other one-off items--rose 42% to GBP1.43 billion.

Total group revenue increased to GBP17 billion from GBP13.88 billion. This compares with a forecast of GBP16.75 billion taken from FactSet based on 18 analysts' estimations.

The company said it expects operating profit to be lower than in fiscal 2022, but it sees significant growth in sales from pricing in its food business, as well as from some pricing and space expansion at Primark.

"Our businesses will continue to seek to recover these higher costs in the most appropriate way," Chief Executive George Weston said.

Primark reported sales in line with its previous guidance of GBP7.7 billion, while operating profit margin improved to 9.8% compared with expectations of 9.6%. This was mainly driven by a significant increase in customer footfall and sales densities as markets recovered from pandemic, the company added.

"Primark has faced significant input cost inflation and sharply moving currency exchange rates. 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," the company said.

Shares at 0822 GMT were up 62.5 pence, or 4.4%, at 1,491.5 pence.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

November 08, 2022 03:38 ET (08:38 GMT)

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