25 September 2018

AB Foods

AB Foods (ABF) is split into five rather different divisions, Sugar, Agriculture, Retail, Grocery and Ingredients

Group 10Created with Sketch.
Group 11Created with Sketch.
52 Week High-Low
£33.87 - £21.86
Page 1Created with Sketch.
Net Yield
Group 12Created with Sketch.
Hist / Pros Per
Page 1Created with Sketch.
Equity Market Cap

AB Foods (ABF) is split into five rather different divisions, Sugar, Agriculture, Retail, Grocery and Ingredients. By far the largest of these is Retail or more accurately, Primark, a budget fashion retailer. Primark is unique in that it currently doesn’t have any form of online presence and operates solely out of a store estate. This strategy splits opinion amongst investors.

Bears will say that shopping is rapidly shifting online and Primark aren’t going to be able to compete with online giants such as Amazon. If you listen to some pundits, the high street is said to be “dead”. We have seen Toys R Us and Maplin plunged into administration, New Look announce that it has shut 60 stores and cut almost 1,000 jobs and most recently, Next has reported multiple store closures.

The bulls would argue that Primark’s differentiated offering should allow them to continue to survive on the high street in an increasingly competitive environment. Given the expense of delivery costs, it is impossible to sell a £2 t-shirt at an acceptable margin online. In addition to this, we are increasingly hearing that shoppers are looking for an “experience”. Primark offer this through what can best be described as a treasure hunt for the hidden gems in their shops amongst their other ludicrously cheap options. 

Understanding Finance

Helping clients understand what we do is key to building relationships. To explain some of the industry jargon that creeps into our world, we’ve pulled together a section of our site to help.

Also in this issue
Understanding Finance

Maintenance capex can be considered the cost of sustaining current revenue and profits for a business. This type of outlay is equivalent to a normal operating expense; such an example would be the…