- Primark enjoyed record sales after some stores reopened this month
- But projected losses for the second half stand at £700m
Primark stores in England and Wales enjoyed record sales in the week after they reopened on 12 April. Welcome news for parent company Associated British Foods (ABF) after months of government mandated closure.
But Primark was still reeling from prior lockdowns and restrictions, knocking ABF’s overall sales and profits for the six months ending February. Over the past year, the clothing business has lost £3bn in sales and more than £1bn in profits.
Things are picking up; at the end of the first half, it was trading from just over a fifth of its retail selling space. Its 20 Scottish stores are expected to reopen later this month.
However, eurozone progress “has been mixed”, the group said, with some reopenings delayed or restricted. Second-half lost sales are now projected at £700m. Meanwhile, an “exceptional” first-half performance from ABF’s foods businesses will be followed by softer trading in the second.
Still, ABF has reintroduced the dividend at 6.2p and will repay £121m in furlough money. For now, hold.
Last IC view: Hold, 1,699p, 3 Nov 2020
| ASSOCIATED BRITISH FOODS | ||||
| ORD PRICE: | 2,390p | MARKET VALUE: | £18.9bn | |
| TOUCH: | 2,381-2,390p | 12-MONTH HIGH: | 2,528p | LOW: 1,614p |
| DIVIDEND YIELD: | nil | PE RATIO: | 47 | |
| NET ASSET VALUE: | 1,209p | NET DEBT: | 28% | |
| Half-year to 27 Feb | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2020 | 7.6 | 298.0 | 27.5 | nil |
| 2021 | 6.3 | 275.0 | 20.5 | 6.2 |
| % change | -17 | -8 | -25 | - |
| Ex-div: | 03-Jun | |||
| Payment: | 09-Jul | |||
