Associated British Foods, which owns Primark and several grocery brands including Twinings and Kingsmill, forecast a significant increase in sales and profit at its Primark fashion chain in its new financial year and announced a special dividend.
The company reported statutory operating profit of £808m for its 2021 financial year, broadly in line with the statutory operating profit of £810m last year. Combined revenue was up 5 per cent and adjusted operating profit up 10 per cent to £760m, with strong international growth for grocery.
“Our financial performance this year more than ever demonstrates the resilience of the group. This comes from the strength of our brands, the diversity of our products and markets, our geographic spread, conservative financing and an organisation design that permits fast and flexible decision-taking,” commented George Weston, chief executive of AB Foods, said.
The food businesses of the group delivered an adjusted operating profit increase of 10 per cent, driven by high demand and improved productivity.
Weston said they expect Primark to deliver a much improved margin and profit next year, adding that they will be expanding new store pipeline and investing in technology and digital capabilities.
The company proposed a special dividend 13.8p and final dividend 20.5p, amounting to total dividend of 34.3p per share, taking the total dividends for the year to 40.5p per share
“Given the strength of our balance sheet and our confidence in the future we are setting out today a new capital cash allocation policy that provides the Group with the capital it needs both for investment and financial stability while allowing for enhanced returns to shareholders when appropriate. We are announcing a special dividend for shareholders today as a result,” Weston said.
“We have the people and the cash resources to seize the opportunities ahead and we look to the future with confidence.”
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