Operating profit at Associated British Foods (ABF) increased by 40% year-on-year to £931m in the first half of the group’s financial year.

The firm, which owns retailer Primark and a range of food brands, also recorded a 37% increase in its profit before tax to £911m, with earnings per share also increasing by 46% in the same period.

Across the 24 weeks to 2 March 2024, like-for-like sales were up by 2.1% year-on-year, with ABF stating that this was "driven by good performance across most markets due to pricing and well-received product ranges".

Furthermore, revenue increased by 7.5% in the same period to £4.5bn, reflecting continued growth in selling space.

Chief executive at Associated British Foods, George Weston, said: "This is a very strong set of financial results, as we are now benefitting from the restoration of some normality in our markets and in our supply chains. Improvements to the group's operational performance, driven by the investments and strong execution over the last few years, are now becoming visible. Group profit margins are recovering accordingly to more normal levels."

ABF said that in this period, the final £56m of the first £500m and £225m of the second £500m share buyback programmes were completed in this period.

Looking forward, the firm said that it is on track to "deliver significant growth in profitability and cash generation" ahead of expectations at the start of the financial year.

Investment director at AJ Bell, Russ Mould, added: "After a strong trading update in January, Primark-owner ABF has built on this momentum with its first-half results. It delivered an impressive set of numbers with strength across all areas of the business, including the less-heralded food and ingredients arm. The performance of Primark was particularly stunning, suggesting its value offering in clothing is resonating with cost-conscious consumers.

"The company seems to have found a middle ground between its disposable ‘Primarni’ past to providing better quality apparel, still at affordable prices, including in categories like children’s clothes where parents need to regularly update items as their offspring grow. The company’s outperformance of a flatlining UK retail sector suggests it is taking market share from less robust rivals.

"The company’s strong balance sheet and diversified model which the Weston family, with its controlling stake in the business, are committed to, put the company in an enviable position to both reward shareholders and invest in further expansion in the business."

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