Busi­ness In­sight

As­so­ci­ated Bri­tish Foods

The Daily Telegraph - Business - - Business Comment -

The mar­ket will be look­ing for ev­i­dence that Pri­mark has man­aged to shrug off the foul win­ter weather to re­tain its place as one of the high street’s most re­silient play­ers, writes Rhi­an­non Curry.

Owner As­so­ci­ated Bri­tish Foods posts half-year fig­ures to­mor­row.

In­vestors will be look­ing for a re­peat per­for­mance of its full-year re­sults when rev­enues were 12pc higher.

Pri­mark al­ready con­trib­utes more than half of ABF’s prof­its, and with the com­pany eye­ing growth in Europe and the US, the high street chain is po­si­tioned strongly for growth.

How­ever, Pri­mark may have been hit by the poor weather at the start of the year, which led many shop­pers to stay at home.

In Jan­uary, a sharper than ex­pected drop in prices hit sales at ABF’s sugar divi­sion, dent­ing an oth­er­wise strong fes­tive pe­riod. The abo­li­tion of the EU’s sugar quota last Septem­ber for the first time since 1968, has had an im­pact.

That, cou­pled with a bumper har­vest of sugar beet in Europe has re­duced de­mand and meant prices have been sig­nif­i­cantly lower.

Strengths

◆ Pri­mark has weath­ered the re­tail gloom bet­ter than other brands

◆ Over­seas op­er­a­tions have helped off­set weaker ster­ling

◆ Good scope for growth

Weak­nesses

◆ Share price has strug­gled in re­cent months

◆ Sugar divi­sion drags on over­all per­for­mance

◆ Bad weather may have hit re­tail prof­its

Threats

◆ Con­sumer con­fi­dence con­tin­ues to wane

◆ Higher costs, such as busi­ness rates and man­u­fac­tur­ing ex­penses

◆ More pres­sure on sugar prices

Op­por­tu­ni­ties

◆ Ex­pand­ing Pri­mark into new mar­kets

◆ Trans­ac­tional web­site for its cloth­ing and home­ware

◆ More brand tie-ups like Harry Pot­ter range

Pri­mark con­trib­utes more than half of AB Foods’ prof­its

George We­ston Chief ex­ec­u­tive

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