Primark owner AB Foods shares soared on Tuesday as the company announced growing profits across the board with notable improvements in the food business.
While investors will be happy to see strength in the food business, Primark is always the main event for AB Foods and a 7.5% increase in sales fired up the bulls on Tuesday.
“After a strong trading update in January, Primark-owner Associated British Foods has built on this momentum with its first-half results,” said Russ Mould, investment director at AJ Bell.
The group was top of the FTSE 100 leaderboard, gaining 9% after posting a 39% increase in first-half profits.
Primark continued its recovery from the pandemic as new initiatives such as click-and-collect helped bolster sales and increased store space. Primark’s budget range was been particularly well received during the cost of living crisis and like-for-like sales rose 2.1%.
“This is another very strong earnings report from Associated British Foods. The British multinational food processing and retailing company reported a 39% jump in first half profit and expects to deliver significant growth in all of their operating sectors,” said Mark Crouch, analyst at investment platform eToro.
“ABF’s jewel in the crown Primark, delivered strong sales revenues and improved margins. Disruption that had hindered supply chains earlier in the year seems to have subsided and the business has pushed ahead with their store expansion programme and increased roll out of click & collect service.
“Grocery, ingredients, sugar and agriculture arms all enjoyed increased profitability and as a result, shareholders have been rewarded with an interim dividend increase of 46%.
AB Foods’ hiked the interim dividend to 20.7p.