RE: teccc8 Nov 2022 08:10
ABF results ….. brings home the impact of Inflation, wage costs and fx!
From The Guardian news stream….
“ With its grocery, sugar, agriculture, ingredients and retail divisions, Associated British Foods is a solid bellwether of economic conditions.
And this morning, the owner of the Primark clothing chain has warned that it faces rising costs, just as the cost of living crisis hits spending.
In its full-year results, ABF warns that its business has faced cost inflation across an unprecedented range of inputs in the last year, even as profits bounced back as the impact of Covid-19 faded.
Chairman Michael McLintock estimates that inflation pushed up costs across the Group by some £1bn in this year alone in the last year.
He says ABF "encountered the most challenging economic conditions for many years with sharply rising and broadly based inflation, as well as highly volatile input costs and exchange rate.
And he adds: "Although hard work has successfully recovered much of this cost inflation, more remains to be done."
Primark faces a range of challenges. ABF says input cost inflation is expected to be significant in the year ahead, due to rising raw materials and energy costs, and higher wages.
The firm also faces higher purchasing costs which have resulted from the strengthening of the US dollar against sterling and the euro.
In the 12 months to 17 September, sales at Primark were 43% higher than last year, at £7.7bn, as its shops reopened after pandemic lockdowns. ABF made a pretax profit of £1.076bn, up 48%.
For the year ahead, ABF expects significant sales growth across the business, but expects a fall in adjusted operating profits and adjusted earnings per share, due to those higher costs.“
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