Earnings Alerts

Associated British Foods (ABF) Earnings Go Beyond Expectations: Substantial Increase in 1H Adjusted Operating Profit

  • AB Foods’ adjusted operating profit increased by 39% year over year to GBP951 million, beating the estimate of GBP823 million.
  • The retail adjusted operating profit was recorded at GBP508 million, a surge of 45% y/y, surpassing the forecast of GBP476.9 million.
  • Grocery adjusted operating profit rose by 33% y/y to GBP230 million, outperforming the anticipated GBP202 million.
  • The sugar unit’s adjusted operating profit grew by 29% y/y to GBP125 million, exceeding the estimate of GBP108.6 million.
  • Although the agriculture adjusted operating profit climbed to GBP14 million, up 17% y/y, it fell short of the GBP15.7 million forecast.
  • Ingredients adjusted operating profit saw a rise of 15% y/y to GBP117 million, beating the GBP99.1 million prediction.
  • Adjusted pretax profit jumped up by 37% y/y, hitting GBP911 million, outdoing its GBP796.7 million estimate.
  • The interim dividend per share increased to 20.7p from 14.2p y/y, which is higher than the estimated 16.8p.
  • Revenue saw a minor increase of 1.8% y/y and was recorded at GBP9.73 billion, slightly less than the GBP9.83 billion estimated.
  • While the retail revenue saw growth of 6.4% y/y to GBP4.50 billion, it didn’t meet the estimated GBP4.55 billion.
  • The sugar unit revenue rose marginally by 0.2% y/y to GBP1.17 billion, lower than the GBP1.25 billion estimate.
  • The estimated sales growth at constant FX was +7.53%, but the actual retail sales at constant FX were slightly lower at +7.5%.
  • AB Foods mentioned aiming for a total of 530 Primark stores by 2026, an increase from the current 440 stores.
  • AB Foods also anticipates a “moderate improvement” in the adjusted operating margin in Primark in the second half of the year in comparison to the first half.
  • Furthermore, they expect sugar unit to show substantial improvement in profitability resulting from a more typical beet crop and production level.

A look at Associated British Foods Smart Scores

FactorScoreMagnitude
Value3
Dividend2
Growth5
Resilience3
Momentum5
OVERALL SMART SCORE3.6

Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma

Associated British Foods PLC, a diversified international food, ingredients, and retail group, shows a promising long-term outlook according to Smartkarma Smart Scores. With a Growth score of 5 and a Momentum score of 5, the company is positioned well for future expansion and market performance. Additionally, a Value score of 3 indicates a decent valuation, while a Resilience score of 3 suggests the company’s ability to navigate challenges effectively.

The company’s wide geographical presence across China, South America, Africa, Europe, Australia, New Zealand, Asia, and the United States provides a strong foundation for sustained growth. Although the Dividend score is at 2, signaling room for improvement in this aspect, the overall positive outlook based on the Smart Scores highlights Associated British Foods as a potentially lucrative investment for long-term investors.


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