Associated British Foods PLC (GB:ABF), owner of fashion brand Primark, reported a 33% year-over-year increase in its adjusted pre-tax profits to £1.97 billion for FY24. The company also announced a special dividend of 27p per share and a final dividend of 42.3p. The total dividend of 90p per share for FY24 marks a growth of 50% over the previous year. ABF stock gained 2.7% as of writing.
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Associated British Foods (ABF) is a diversified company operating in the grocery, agriculture, ingredients, sugar, and retail segments. The company serves customers in over 100 countries globally.
ABF Sees Robust Annual Growth
For FY24, ABF reported a 38% year-over-year growth in its adjusted operating profit on a constant currency basis. Meanwhile, revenue grew 4% to £20.07 billion, driven by strength in the Retail and Food segments.
Among ABF’s segments, the Retail business saw a 51% growth in its operating profit, with an expansion in margin to 11.7% from 8.2% in 2023. Meanwhile, Grocery’s operating profit was up 17%, and sales and profit from ABF’s Sugar business surpassed those of 2023.
Additionally, ABF announced a share buyback programme of £500 million that is expected to be completed in FY25.
ABF Sets Positive Outlook for 2025
In terms of outlook, ABF is optimistic about the performances of its Retail and Food segments. The company is aiming for mid-single-digit growth in FY25, driven by the store rollout in growth markets in Europe and the U.S.
However, ABF remains cautious about its Sugar business due to a recent drop in European sugar prices. The company expects its FY25 adjusted operating profit for its Sugar business in the range of £50 million to £75 million, down from £199 million in FY24.
Are ABF Shares a Good Buy?
As per the consensus among analysts on TipRanks, ABF stock has been assigned a Hold rating backed by six Holds, three Buys, and one Sell recommendation. The ABF share price target is 2,616.25p, which indicates a change of 13.5% from the current share price.
