Primark parent company rakes in profits up 50%

Associated British Foods (ABF), parent company of the low-cost clothing chain Primark, soared more than 6% on the London Stock Exchange on Tuesday after announcing an annual net profit up almost 50% to 1 billion of books, despite the cost of living crisis.

“The group achieved very good results during the financial year” ended September 16, including a turnover up 16% to 19.8 billion pounds, ABF announced in a press release. Faced with inflation which had cost it a billion pounds a year earlier, the group “implemented selective” and “prudent” price increases which did not divert customers from its brands in the midst of a cost crisis. of life, reports George Weston, the general manager. Primark's sales were “excellent given the circumstances” and “even if consumer demand remains uncertain, Primark is still well placed,” explains the manager. Primark's margins "have decreased slightly, as the group has chosen not to pass on the full extent of the increase in costs (...) to satisfy price-sensitive customers", while household budgets are under pressure, according to Aarin Chiekrie, analyst at Hargreaves Lansdown. But ABF indicated on Tuesday that the margins of its flagship division “are now returning to their historic levels”.

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“Even if the environment remains difficult for consumers, inflationary pressures have eased and volatility is less than 12 months ago,” assured the group. ABF announced on Tuesday a share buyback program of 500 million pounds in addition to a previous, equivalent one, completed in October, as well as a dividend up 37% over one year. Investors applauded and ABF saw its stock jump 6.55% to 2,244 pence on the London Stock Exchange around 09:20 GMT. “One of ABF's main assets lies in its diversified portfolio of activities,” continues Aarin Chiekrie, while the parent company of Primark is also present in the food sector, notably with the Twinings and Ovaltine brands. “This diversification helps spread risks, ensuring that the company is not overly dependent on a single product or division,” he says.