AB Foods’ total annual income is 40% lower due to COVID-19 restrictions
The British multinational company will not pay a final dividend on Tuesday.
The food company sees higher profits from food and sugar units.
In a report on Tuesday, Associated British Foods plc (LON: ABF) said its full year profit was 40% lower than last year as its clothing store Primark remained under pressure in recent months due to the coronavirus pandemic.
The company’s shares fell by more than 1% when the market opened on Tuesday. In the year to date, Associated British Foods has now lost over 35% on the stock market. Confused about choosing a reliable stockbroker for online trading? Here is a list of the few providers to help you make the right choice.
AB Foods will not pay a final dividend
Associated British Foods earned 81.1 pence per share on an adjusted basis in the year ended September 12, compared to a much higher amount of 137.5 pence per share in the previous financial year. The Company’s Management Board did not approve a final dividend on Tuesday.
At £362 million, Primark’s profit was significantly lower than the previous year’s £969 million. The UK company said that sales have recovered in recent months as the government has eased COVID-19 restrictions. But the second wave of the novel flu-like virus, which is pushing stores back into closure, could lead to a £375 million drop in sales.
Primark has yet to build its online business. For the 2021 fiscal year, the Irish fashion retailer expects better sales and profits compared to the 2020 fiscal year. He predicts that sales will take a hit in the first half due to the new COVID-19 restrictions, but is confident that sales will recover significantly in the second half.
In July, Primark rejected the UK government’s bonus paid for the reintegration of employees on leave into the job market.
AB Foods’ profits in the food and sugar segments
The profit from AB Foods’ food segments for the first half of the year was £437 million compared to £381 million in the same period last year. Sugar profit also jumped from £30 million to £100 million.
In a separate message from the UK on Monday, DS Smith said it was too early to consider resuming dividend payments. The cartonboard producer suffered a £15 million drop in annual profits due to the ongoing health crisis.
AB Foods performed quite positively on the stock market last year with an annual profit of around 20%. At the time of writing this article, the British multinational food processing and retail company is estimated to be worth £13.43 billion and has a price/earnings ratio of 18.97.