Shares of Primark owner Associated British Foods PLC (LSE:ABF) surged 9% following a robust first-half financial performance, driven by substantial margin recovery and operational enhancements, prompting it to upgrade its full-year forecasts.
Despite a modest 2% rise in group revenue to £9.7 billion, adjusted operating profit soared 39% to £951 million, and adjusted earnings per share increased by 46% to 90.4p.
CEO George Weston lauded the results as "very strong," attributing the gains to normalised market conditions and improved supply chains while highlighting ongoing investments for sustainable growth amidst geopolitical uncertainties.
Shore Capital's veteran retail analyst, Clive Black, said the results represented a significant 'beat' versus consensus forecasts ahead of Tuesday's numbers.
He added: "ABF lost some buy-side friends around the pandemic, especially with no online presence in Primark and concerns about capital allocation. To be fair to Messrs McLintock, Weston, Bason and Tonge [of the ABF management team], we like the balance now, noting that Mr Weston was somewhat vindicated in not being a busy fool online, whilst positioning the firm, to us, for brighter times ahead and, if the ABF stars do truly align, for considerable potential upside for shareholders."
Shore maintained its 'buy' recommendation, while Barclays raised its price target to £27 a share in the wake of the 'interims', as it said it was increasing its earnings per share forecast by 4%.
In late morning trading, ABF stock was up 232.4p at 2,738.24p.