Food, ingredients and retail group Associated British Foods plc (ABF), which owns Primark, has reported a 16% increase in annual revenue to £19.7bn and said it is “well positioned” for the coming year.
ABF said that trading at Primark remained robust, with revenue up 15% to £9.0bn, boosted by cold weather essentials and other seasonal product lines last winter, followed by strong new year sales of beachwear and luggage and good summer trading led by design trends and collaborations with celebrities such as singer Rita Ora.
However, Primark was also affected by unseasonable weather in several markets and its overall profit for the year was down 3% to £735m. Adjusted operating profit margin dropped to 8.2% from 9.8% a year earlier.
Primark currently trades from 432 stores and has expanded its UK Click + Collect trial after being “encouraged by the early results”.
ABF’s group profit for the year was up 9% to £1.47bn, with both revenue and profit growing in its Grocery, Ingredients and Sugar businesses but lower profitability in Agriculture due to tough market conditions.
Grocery revenues were “well ahead” of last year, the company said, thanks to price increases aimed at mitigating inflation. Its international brands — Twinings, Ovaltine, Blue Dragon, Patak’s, Jordans and Mazzetti — performed well, with particularly strong sales in the US.
British sugar production was significantly down this year after poor weather conditions reduced beet yields and the business had to obtain “expensive alternative sources of supply” to make up for the resulting production shortfall.
Looking ahead, ABF said that although the environment is still “challenging” for consumers, inflationary pressures have eased and there is less volatility than there was 12 months ago.
Chief executive George Weston said that the group is “well positioned for the year ahead”.
