AB Foods share price rises even as profit drops

Shares in Associated British Foods (LON:ABF) have climbed higher in London this morning even as the Primark owner posted a drop in profit for the six months to March, pressured by downbeat performance at its Sugar business. The company, however, cheered investors with a stronger dividend.

As of 08:49 BST, the AB Foods’ share price had added 1.08 percent to 2,533.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.61 percent lower at 7,477.34 points. The group’s shares have given up about 2.5 percent of their value over the past year, as compared with a near one-percent gain in the Footsie.

AB Foods posts HY results

AB Foods announced in a statement this morning that its revenue had inched two percent higher to £7.53 billion in the 24 weeks to March 2. The group’s adjusted profit before tax dipped two percent to £627 million during the reported period.

“This is a robust set of results. Profit at AB Sugar was substantially reduced but, from this period, we expect our sugar profitability to improve,” the company’s chief executive George Weston commented in the statement, adding that its fashion chain Primark had “delivered excellent profit growth, driven by further development of our customer experience and selling space expansion”. The company further hiked its payout to shareholders by three percent to 12.05p.

Today’s results come after earlier this month, Liberum commented that Primark was “giving shoppers what they want” as the fashion chain’s biggest store opened its doors in Birmingham.

Analysts on FTSE 100 group

The 18 analysts offering 12-month targets for the AB Foods share price for the Financial Times have a median target of 2,800.00p, with a high estimate of 3,400.00p and a low estimate of 2,100.00p. As of April 19, the consensus forecast amongst 23 polled investment analysts covering the Primark owner has it that the company will outperform the market.