Associated British Foods PLC (LSE:ABF) (ABF) has hiked its final dividend and announced a new £500 million share buyback on a surge in full-year profit.
A total 90p per share dividend was declared in full-year results on Tuesday, against 60p in 2023, incorporating a special reward of 27p.
This followed a 43% jump in pre-tax profit to £1.92 billion as revenue ticked up 2% to £20.01 billion and group adjusted margins widened from 7.7% to 10.0%.
“We delivered a substantial improvement in profitability, excellent cash generation and strong returns as a result of consistent, multi-year investment and a return to some normality in our markets and supply chains,” chief executive George Weston said.
Retail revenue climbed by 5% to £9.45 billion, aided by a 6% increase in sales at Primark and growth across ABF’s European markets.
“Our low-cost model is as strong as ever,” Weston continued, adding: “This is underpinned by a step up in investment in strategic initiatives across digital, product and brand.
“Significant white space for new stores remains across Europe and the US, which we expect to help drive sustainable growth over the medium and long term.”
ABF’s sugar and grocery businesses also recorded higher revenue as sales in its ingredients and agricultural wings fell.
The company previously warned of a hit from lower sugar pricing in the UK and Europe, adding on Tuesday that adjusted operating profit fell over the fourth quarter as a result but climbed 11% to £199 million for the year.
This was set to fall to between £50 million and £75 million next year before profitability recovered in 2026, ABF said.
The new £500 million buyback will be completed by the end of the 2025 financial year and follows £565 million of repurchases in 2024, ABF added.