Primark owner plans £500m share buyback

The group that owns Primark has announced plans to buy back a further £500 million shares and pay a special dividend after a rise in annual profits.
Associated British Foods reported that pre-tax profits rose to £1.91 billion — up from £1.34 billion — in the year to September 14. The group’s adjusted operating profit, its preferred measure, increased to just under £2 billion, up from £1.51 billion the previous year.
Revenue at the FTSE 100-listed group rose by 2 per cent to £20 billion over the period, up from £19.75 billion last year, after a robust performance from its grocery division and a solid outcome from its Primark clothing business was partially offset by accelerating weakness in its sugar operations.
The group announced plans to distribute a special dividend of 27p a share on top of the final dividend of 42.3p a share. It will also return an additional £500 million to shareholders over the next year.
George Weston, chief executive, said: “This was a year of very strong financial and operational progress across the group. 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.”
ABF, which is controlled by the billionaire Weston family, operates in 55 countries and employs 133,000 people. As well as its sugar business, it owns Primark and makes products such as Twinings Tea, Kingsmill bread and Ryvita crackers.
The sugar business is about 20 per cent the size of Primark in terms of profit contribution. The discount fashion chain, which operates around 440 stores worldwide, accounts for about two thirds of ABF’s profits.
Grocery sales rose by 4 per cent during the latest year, while Primark sales grew 6 per cent, which it credited to a “strong performance” in US, France, Spain, Italy and central and eastern Europe, as well as growth in the UK, its largest market.
On Primark, Weston said: “Our low-cost model is as strong as ever, as we maintain our relentless focus on delivering great-value clothing and a unique store experience.”
ABF said it expected its store rollout programme to contribute about 4 per cent to 5 per cent every year to Primark’s total sales growth for the foreseeable future.
The company said on Tuesday that it expected the reduction in European sugar prices in the fourth quarter to “impact performance in our sugar business significantly in 2025, with adjusted operating profit for the overall sugar segment expected to be in the range of £50 million to £75 million”.
It had already warned in September that falling European sugar prices would have a “significant” impact in the coming financial year.
ABF expects profitability to recover in 2026 to be more in line with 2024 as a result of the lower beet prices that have been contracted and a “rebalancing” of supply and demand in the market.
Shares in ABF rose 62p, or 2.7 per cent, to £23.51.