Associated British Foods

Ticker ABF

Today's data summary

Market closed
% change
+1.30%
Price Pence
2340.00
Change
+30.00
As of 23:37 06 May 2021
Market cap. Pound sterling
18,525.18 million
As of 21:07 06 May 2021

Latest updates

  1. Primark owner warns of hit to sales

    Primark store

    The owner of the Primark fashion chain, Associated British Foods, has warned of the impact the forced closure of its stores in some European countries will have on its sales.

    It said that given the actions taken in Italy, France, Spain and Austria, stores accounting for 20% of its selling space are now closed until the respective governments permit them to re-open.

    AB Foods said that the stores in these countries account for 30% of Primark's sales, and it had expected sales of £190m from these stores over the next four weeks.

    The rest of the chain, including the UK which represents 41% of sales, "has seen like-for-like sales declines over the last two weeks and these have accelerated over the past few days as a result of reduced footfall".

    "We are managing the business appropriately but do not expect to significantly mitigate the effect of the contribution lost from these sales."

    However, AB Foods added that since it issued a trading statement in February, the situation in China had improved, with most factories supplying Primark having re-opened.

    "As a result, supply shortages from that country are now expected to be minimal," it said.

    AB Foods added it had "not seen a material impact in our sugar, grocery, ingredients and agriculture businesses".

  2. Primark ' is well-placed to handle disruptions'

    Primark shoppers

    Responding to Primark's warning over coronavirus fears, Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said there is some good news in the retailer's owner' ABF figures published today.

    "The good news is the group has existing suppliers in other regions, which could be called on to plug any holes in the production line," she said.

    "It also builds stock in the lead up to Chinese New Year, meaning it has extra inventory to fall back on for now.

    "The net effect is Primark is well placed to handle near-term disruptions, but it’s one to keep an eye on."

    Shares have fallen 2.25% to 2,525.

  3. FTSE 100 - the biggest winners and losers

    At the close of trade the biggest riser on the 100 share index was Ocado, which rose by 4.25%, followed by Kingfisher, up 3.83% and Primark-owner Associated British Foods up 2.18% and Sainsbury's up 1.94%.

    The biggest fallers were NMC Health, down 10.59%, Standard Life Aberdeen, 3,35% lower and Rentokil Initial, which was 2.23% down at the close.

  4. FTSE 100 clings onto gains

    Andrew Oil platform

    The FTSE 100 remains in positive territory - just - as we go into lunchtime. It's at 7,587.74, a rise of 12.4 points or 0.16%.

    Primark-owner Associated British Foods is leading the pack - up by 3.1%.

    The mid-cap FTSE 250 is also ahead at 21,823.65, that's a rise of 63.12 points or 0.29%.

    Premier Oil has extended its gains following its acquisition of some North Sea oil assets, including BP's Andrew platform (see earlier post) and is now up by 16.81%.

  5. Retail shares romp ahead

    Shopping basket of Morrisons goods

    Let's check in on the best and worst performing shares on the FTSE 100 so far.

    Retailers dominate the top risers. Supermarket Morrisons leads the pack, gaining nearly 3%, despite reporting a fall in sales over the Christmas period.

    Arlene Ewing, investment manager at Brewin Dolphin, said the drop was "not as bad as some had expected" and initial indicators of its decision to rebrand some McColl's shops as Morrisons convenience stores "look promising, with another 20 or so stores to be trialled at the beginning of 2020".

    B&Q-owner Kingfisher has risen by about 2.3%, while Associated British Food, which owns Primark is also up by about 2.3%.

    It's a mixed bag among the biggest fallers, with Standard Life Aberdeen shedding 2.77%, Rentokil Initial is down 2.3% and Polymetal International just over 1% lower.

  6. ABF results send shares climbing 6%

    Primark shoppers

    Primark owner Associated British Foods earlier revealed that adjusted operating profit hit £1.42bn in the year to 14 September, a 1% climb on the previous year.

    That's pleased the market which has sent the company's shares up almost 6% today, to lead the FTSE 100 winners.

    ABF shares are up 132 at 2,381.

  7. Primark's margins hit by sterling

    Primark

    Associated British Foods has issued this guidance on its clothing arm Primark.

    It says Primark will continue to expand its selling space next year, with the most stores being added in France and Spain. It also says Primark has a strong pipeline of good quality sites.

    "We expect cost reductions in both the cost of goods and overheads during the year, but the weakness of sterling during this financial year will result in a margin decline for Primark in the first half.

    "The sterling exchange rate is currently very volatile but, at current exchange rates, we now expect margin in the second half to be in line with the same period this year and margin for the full year to be only a small reduction on that achieved this year."

  8. Primark-owner profits fall

    primark

    George Weston, chief executive of Associated British Foods, has this to say as it reports full-year results.

    "The group delivered a resilient performance this year, with strong profit growth from grocery and Primark which more than offset the profit decline in sugar.

    We continued to pursue the opportunities to grow our businesses with a gross investment of over £800m. Next year the group is well-positioned for further progress, with the continued expansion of Primark, a material improvement in our sugar profit and strong profit growth in grocery."

    The group's pre-tax profit fell by 8% to £1.17bn

  9. Primark can't avoid Brexit

    Sun glasses at Primark store  in Birmingham

    Back to Primark, owned by Associated British Foods which issued a trading update earlier. ABF's shares are down 1.8%.

    Sophie Lund-Yates, equity enalyst at Hargreaves Lansdown, says: “Primark is managing to dodge many of the issues troubling the high street, in a climate where tough conditions are forcing many competitors to close stores, Primark’s sales growth is actually being driven by new shop openings.

    "That’s not to say the retailer is home and dry though, like-for-like sales are actually in decline. Added to that, Brexit related headwinds means costs are expected to increase next year, and margins are expected to dip.

    "The group also needs to strike a fine balance between keeping sales moving and opening too many new stores - over the next financial year, one million square feet of new space is to be added to the store estate.

    "Opening new shops is certainly a tactic that has worked for ABF, and continues to offset the decline in like-for-like performance. However, the thing to remember is it can’t follow this method forever.”

  10. Primark-owner on Brexit

    primark

    More from Associated British Foods, mentioned earlier.

    It says two thirds of its operating profits are earned outside the UK and the weakening of sterling against our trading currencies, particularly towards the end of the financial year, will result in a translation gain this year of£10m.

    With regards to Primark it says: "The strengthening of the US dollar during this year and the recent weakening of sterling will increase the cost of goods for next year."

    But, it adds that it businesses "have completed all practical preparations should the UK no longer be a member of the EU and contingency plans are in place should some of our businesses experience disruption at the time of exit."

  11. London open

    logo

    In early trading, the FTSE 100 is up 29 points at 7,311.

    Associated British Foods - owner of Primark - is the biggest faller, down 2%.

    Lloyds Banking Group is down 1.8% after warning it could take a £1.8bn hit for payment protection insurance.

    The biggest riser is Centrica, up 2%.

    The FTSE 250 is up 61 points at 19,770, led by property centre owner Intu which is up 17% after reports it could receive a takeover offer.

  12. Primark sales fall 2%

    shoppers with primark bags

    There's a trading update from Associated British Foods.

    It says sales at its retail arm Primark for the full year are expected to be 4% ahead of last year ( at constant currency and actual exchange rates), with increased selling space partially offset by a 2% decline in like-for-like sales.

    "Our full year outlook for the group is unchanged, with adjusted earnings per share expected to be in line with last year. Strong profit performances this year from Primark and grocery are expected to be offset by the anticipated decline in AB Sugar."

  13. Primark sales 'decline'

    Primark bags

    Associated British Foods has issued a trading update saying group revenue from continuing businesses for the 40 weeks ended 22 June 2019 was 3% up on the same period last year.

    It expects "good profit growth" in its retailing arm Primark year and says its outlook for the group;s results is unchanged.

    At Primark it sales in the year-to-date were 4% ahead of last year as increased selling space "partially offset by a decline in like-for-like sales".

    It said Primark recorded a "further significant increase" in market share but that like-for-like sales - which strip out store closures - were "held back by unseasonable weather in May which compared to a favourable market environment in the corresponding period last year".

    "We have seen an improvement in sales in June," it added.

  14. 'Sound' Primark

    Primark bags

    More on Associated British Food which reported results this morning.

    Its shares are down 1.3%.

    Graham Spooner, investment research analyst at The Share Centre, this is because sales at its clothing arm, Primark, have fallen 2%.

    “The full year outlook remains unchanged with adjusted operating profit in line with last year. We therefore continue to maintain our 'hold' recommendation as the longer term growth prospects for Primark remain sound and there is increasing global demand for food, although the sugar business remains a concern,” he said.

  15. Primark sales up

    primark store front with people walking past

    Association British Foods has published a trading update for the first half of its financial year.

    It said: "For the half year, other than the expected reduction in sugar revenue, sales growth will be delivered by all of our businesses. We expect adjusted earnings per share to be broadly in line with the same period last year, with lower net financial expenses offsetting a small reduction in adjusted operating profit."

    At Primark, its clothing arm, sales are expected to be 4% ahead of last year in the first half and like-for-like sales down 2%.

    "With a much higher margin, profit is expected to be well ahead of the same period last year. Early trading of the new spring/summer range has been encouraging," the company said.