Primark proprietor AB Meals warns of ‘substantial’ price inflation By Reuters

LONDON (Reuters) -Primark proprietor Related British Meals (OTC:) faces “substantial and risky” enter price inflation that may hit ends in its present monetary 12 months, it stated on Tuesday, taking the shine off a 42% leap in 2020-21 revenue.

AB Meals (LON:), which additionally owns sugar, grocery, substances and agricultural companies, reported annual adjusted working revenue of 1.44 billion kilos ($1.65 billion), up from 1.01 billion kilos in 2020-21, primarily reflecting larger Primark gross sales after the top of COVID-related restrictions.

The group additionally introduced a 500 million pound share buyback programme and an 8% improve to its complete dividend.

AB Meals, shares through which have fallen 29% this 12 months, stated in September that Primark had taken a industrial resolution to restrict additional value will increase in its 2022-23 12 months past these already deliberate, in search of to keep up its worth credentials amongst customers.

“Now we have determined to carry costs for the brand new monetary 12 months on the ranges already carried out and deliberate and to face by our prospects, somewhat than set pricing in opposition to these extremely risky enter prices and alternate charges,” stated Chief Government George Weston.

That holding down of costs, mixed with larger power and labour prices in addition to greenback power that reduces its buying energy, will dent Primark’s revenue margin, the group stated.

AB Meals expects 2022-23 revenue in its grocery enterprise, which incorporates Twinings tea, Jordans cereals, Kingsmill bread and Ovaltine drinks, to be broadly in step with 2021-22.

Revenue within the sugar enterprise is anticipated to be nicely forward of 2021-22.

($1 = 0.8705 kilos)