Associated British Foods group adjusted operating profit jumped 42% to £1.4bn in their 2022 full year with a bounce back in Primark doing the heavy lifting in profitability.
All business segments enjoyed an increase in revenue while all segments apart from the grocery segment saw adjusted operating profit increase.
The retail segment – representing the Primark – revenue increase to £7.6bn, up from £5.5bn in the year prior.
Primark has been reliant on retail footfall to distribute their value clothing and were particularly impacted during the pandemic. A sharp increase in the number of the shoppers visiting their stores was instrumental in sales recovering in 2022.
The group have seemingly learned their lesson from the pandemic and have emphasised their push into online sales by improving their website and Click and Collect launching in 25 UK stores.
Despite the rebound in sales, analysts pointed to a big decision on pricing as cost’s increase while economic conditions become ever softer.
“Talk about a comeback. Associated British Foods’ sales and profit have jumped for joy like a shopper finding an absolute bargain. The company is fighting back from Covid with a vengeance, with its Primark chain seeing a big jump in sales as the world returns to a more normal state post-pandemic,” said AJ Bell investment director Russ Mould.
“The decision to now hold prices in Primark and sacrifice some margin as inflation remains high shows that it cares more about its customers than profits. It’s a calculated move which Primark hopes will earn it some with goodwill with customers as the company which understood the financial pressures people are under.”
Associated British Foods shares were trading 4.7% higher at the time of writing and were one of the best performers on the FTSE 100.