Associated British Foods’ (ABF) first-half revenue fell by 2% to £9.5bn, ignoring exchange rate impacts. Primark revenue grew by 2% to £4.7bn, with growth being driven by new store openings. Grocery revenue was flat, while all other divisions posted declines.
Underlying operating profit fell by 28% to £0.7bn, reflecting declines across all divisions.
Free cash flow improved from £27mn to £71mn, helped by inventory reductions at Primark. Net debt rose from £2.8bn to £3.0bn.
Following a previous downgrade to guidance, ABF still expects underlying operating profit to fall below last year’s level of £1.7bn. The outlook for Sugar has deteriorated, with the division now expected to post a full-year loss.
The interim dividend of 20.7p per share was unchanged.
ABF confirmed its intention to spin out Primark from the business by the end of 2027.
The shares fell 4.8% in early trading.
Our view
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Associated British Foods key facts
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