Associated British Foods
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.
◆ Primark has weathered the retail gloom better than other brands
◆ Overseas operations have helped offset weaker sterling
◆ Good scope for growth
◆ Share price has struggled in recent months
◆ Sugar division drags on overall performance
◆ Bad weather may have hit retail profits
◆ Consumer confidence continues to wane
◆ Higher costs, such as business rates and manufacturing expenses
◆ More pressure on sugar prices
◆ 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