5th Nov 2019 08:13
(Alliance News) - Shares in Primark-owner and food maker Associated British Foods PLC rose Tuesday after it boosted its dividend on rising revenue, despite annual profit dipping amid an impairment to its bakery business.
Shares in AB Foods were 4.2% higher - the best performer in the FTSE 100 index in early trading - at 2,345 pence in London on Tuesday.
For the year ended September 14, pretax profit fell 8.6% to GBP1.17 billion from GBP1.28 billion the year prior. This was despite revenue rising 1.6% to GBP15.82 billion from GBP15.57 billion the year before.
Profit performance was hurt by a GBP79 million exceptional charge related to the impairment of its Allied Bakeries unit, amid low bread prices and rising competition.
"The group delivered a resilient performance this year, with strong profit growth from Grocery and Primark which more than offset the profit decline in Sugar," Chief Executive George Weston said.
"We continued to pursue the opportunities to grow our businesses with a gross investment of over GBP800 million," Weston added. "Next year the group is well-positioned for further progress, with the continued expansion of Primark, a material improvement in our Sugar profit and strong profit growth in Grocery."
"The positive reception by US consumers to Primark, combined with our profitable store model, gives us confidence for further expansion in the US market. Two further US stores will open in the new financial year, at American Dream, the retail and entertainment complex in New Jersey which will now open in spring 2020, and Sawgrass Mills, Florida in summer 2020," Weston said.
London-based AB Foods proposed a 34.30 pence per share final dividend, up 3.0% from 33.30p the year prior. For the full year, the dividend rose 3.0% to 46.35p from 45.00p the year before.
For the new financial year, AB Foods expects its sugar unit to benefit from stronger prices and for the grocery and Primark divisions to continue to boost profit and revenue.
By Ahren Lester; [email protected]
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