ASBFY Associated British Foods Plc (PK)

By Joe Hoppe

Associated British Foods PLC said Thursday that its fiscal 2022 adjusted operating profit and adjusted earnings per share are expected to surpass the previous year's on strong sales growth, and that it anticipates rising sales, but declining profit, in fiscal 2023.

The U.K. conglomerate said group revenue for the year ending Sept. 17 is expected to be well above the 13.88 billion pounds ($16.01 billion) in the prior year.

ABF's Primark business's total sales for fiscal 2022 are expected to be around 40% above the previous year's, at about GBP7.7 billion with a full-year operating margin of 9.6%, reflecting the end of coronavirus-related restrictions and normalization of consumer behavior, the company said.

Primark's U.K. like-for-like sales improved in the fourth quarter to near-prepandemic levels, though continental Europe like-for-like sales were weaker than expected in the fourth quarter.

The company reported higher food-business revenue, reflecting price actions and some volume increases, particularly in ingredients.

For fiscal 2023, ABF expects significant growth in sales, though it foresees declines in adjusted operating profit and adjusted earnings per share.

Food-business profit is expected to rise with significant further input cost inflation and pricing actions, along with additional investment in growth initiatives and higher marketing spend. However, despite expecting sales growth, declining consumer disposable income due to inflation and a commercial decision to limit further pricing actions will hit the operating profit margin for Primark, the company said.

The board will consider in November whether it has surplus cash and capital to return to shareholders, it said.

Write to Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

September 08, 2022 03:03 ET (07:03 GMT)

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