ABF dividend: cash cover and yield
ABF's ordinary dividend is 63.0p, with a 20.7p interim, and its base forecast keeps DPS at £0.63 through the first two periods before £0.65 in the third. In 2025, ABF generated £638m of free cash flow against £656m of dividends, while buybacks and other cash demands narrowed the buffer.
How much does ABF pay in dividends?
Dividends remain cautious because cash demands compete with shareholder returns. Base DPS stays at £0.63 through the first two periods. It reaches £0.65 in the third. The bear case cuts DPS to £0.50 and then £0.40, while the bull case rises to £0.65, £0.70 and £0.75. The base follows the 63.0p ordinary dividend and the maintained 20.7p interim. The bear case reflects 2025 dividends of £656m against free cash flow of £638m.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Earnings | 1,000 (900 / 1,120) | 1,080 (850 / 1,300) | 1,160 (900 / 1,450) |
| Shares (millions) | 701 (704 / 691) | 699 (705 / 681) | 696 (706 / 671) |
| Dividends per share | 0.63 (0.50 / 0.65) | 0.63 (0.40 / 0.70) | 0.65 (0.40 / 0.75) |
| Price to earnings | 13.00 (10.00 / 15.50) | 13.50 (9.50 / 17.00) | 14.00 (10.00 / 18.00) |
What this means. Price to earnings shows how many pounds investors pay for each pound of the company's yearly profit.
Does ABF's dividend have cash cover?
For 2025, cash from operations was £2,231m, but working capital tied up £95m. Capital spending and lease payments then reduced the amount available, leaving free cash flow of £638m. ABF’s own measure was £648m, because its definition makes different adjustments.
Shareholder payments have sometimes exceeded the cash generated in the same year. Free cash flow is the surplus after running the business and funding necessary investment; dividends and buybacks are separate choices to return money to shareholders. ABF completed a £500 million buyback programme in August 2025 and announced another £250 million programme for the following financial year.
| Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | |
|---|---|---|---|---|---|
| Free cash flow | 638 | 1,262 | 231 | 38 | 456 |
| − Dividends paid | 656 | 502 | 345 | 380 | 49 |
| − Share buybacks | 603 | 562 | 448 | 0 | 0 |
| = Free cash flow not paid out | 185 | 403 | |||
| Paid out, % of free cash flow | 197.3% | 84.3% | 343.3% | 1000.0% | 10.7% |
What this means. The company's own figures seem to conflict because it leaves lease liabilities out of net cash but includes them in net debt, while our calculation leaves them out of debt.
What is ABF's dividend yield against its share price?
The hurdle can be made concrete. If an investor wanted a 10% total return in a year, kept the P/E unchanged and received the current 3.2% dividend yield, earnings would need to grow by roughly 6.8%. A changed dividend, a lower multiple or a disappointing forecast would alter that requirement.
The 2029 range is unusually wide for a mature retailer and food group. The bear case gives 1275.43 GBp, while the bull case gives 3887.59 GBp. Today’s price is 1942.50 GBp. The forecast assigns 30% to bear, 55% to base and 15% to bull, because the evidence supports recovery but also shows material Sugar and Primark risks.
| Today (Oct 17, 2026) | |
|---|---|
| Share price | 1942.50 |
| P/E, last 12 months (calculated) | 14.57x |
| Dividend yield (calculated) | 3.2% |
What this means. The enterprise value is slightly lower than the market value because the company has more cash than debt, reducing the effective price of buying the whole business.