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Summary
- Associated British Foods PLC’s closure of stores in autumn might result in lost sales worth £430 million
- Primark’s revenue and profit for the full year are expected to beat the financial results of 2020
Associated British Foods PLC (LON:ABF) announced on 4 December that the closure of its stores in autumn might result in lost sales worth £430 million ($578.4 million). However, there have been around 25 per cent reduction in the operating costs of the stores during closure, and it anticipates that Primark’s revenue and profit for the full year will beat the financial results of 2020, covering the shortfall in the pre-Christmas trading.
Addressing the Annual General Meeting of the company that was held 4 December, Michael McLintock, the Chairman said that major stores of ABF such as that in Belgium, England, France and the Republic of Ireland have reopened in the last week and since then, the sales have been growing very strong, especially that of Primark stores which have been giving appealing and exciting offers.
Associated British Foods owned Primark, the fashion chain, which does not offer online services, had generated a profit of £362 million in the fiscal year ending on 12 September 2020.
Also Read: Associated British Foods Plc announces re-opening of its Primark stores
The opening hours of stores in England and the Republic of Ireland have also been extended due to the nearing festive season, catering to the anticipated higher customer demand. The spreading of shopping hours would help in ensuring a safer environment for the staffs as well as the customers.
John Bason, ABF's finance chief said the stores were performing phenomenally after reopening, which can clearly be seen from the trading before the lockdown and after the first few days of it getting lifted. In fact, Ireland’s stores are breaking their daily sales record after operating for two days. He expects a strong run-up to Christmas.
Thirty-four of ABF’s stores across its markets remain temporarily closed, which are spread in areas such as Northern Ireland and Austria, representing 7 per cent of the Group’s total retail selling space. In the month of November, 62 per cent of the stores remained closed, which is the highest.
New stores in the US, namely Sawgrass Mills in Florida and American Dream in New Jersey had been opened since the financial year 2020-21 began. These stores have been successfully running, and the like-for-like performance in the reopened stores is very encouraging, contributing towards the spurt in the opening programme of the US store.
The opening of the Group’s first store in Rome, Italy in the previous week, witnessed a very strong response from the customers. ABF also inaugurated its 5th store in Barcelona, Spain and 50th store in León, Spain. The Group now has a total estate of 389 stores and retail selling space of 16.5 metre square feet.
The trading across Grocery, Sugar, Ingredients and Agriculture, during the early stage of the financial year, surpassed the expectations as well as previous year’s figures. The Group forecasts 0.9m tonnes of UK sugar production for FY 2020-21, which is below last year’s production, also lower than previously expected and well below last year's 1.19m tonnes.
The Group also notified that keeping in mind the transition period UK-EU coming to an end on 31 December, the contingency plans have been put in place and all practical preparations have been completed.
On Friday, 4 December 200 the shares of Associated British Foods ended at GBX 2,366.00, almost 3 per cent higher from of last day’s close of GBX 2,303.00 on LSE.
