Associated British Foods Share Discussion Threads

[netcurtains] 13/7/2021 07:36

Just a reminder ABF are ahead of expectations:

Primark revenues reached £1.6bn in the third quarter with the reopening of all stores and the opening of seven new stores. These revenues were well ahead of last year's third quarter sales of £0.6bn, when the first lockdowns resulted in the closure of all our stores for an average period of 12 weeks. This quarter, sales in the reopened stores were ahead of expectation in all markets, a number of new sales records were set and the like-for-like1 performance was much improved on earlier periods during this pandemic reflecting an

[suetballs] 12/7/2021 16:47

The lack of an online presence pops up time and time again. For Primark I don't think it's a major issue. boo down a lot today and that is online?
Suet

[philanderer] 12/7/2021 16:27

Afternoon EI , looks like the only reason.

Testing the 2021 low of 2117p


edit:

so much for broker targets ;-)

6th july Kepler hold tp 2500p
1st july Credit Suisse outperform tp 2710p

1st july ++++ trading update ++++


11th june Morgan Stanley overweight tp 2900p
5th may Jefferies buy tp 2900p
29th april Barclays overweight tp 2700p
20th april Goldmans neutral tp 2700p
20th april ShoreCap buy -


20th april ++++ interims ++++

[essentialinvestor] 12/7/2021 16:00

Phil, Primark element of the business de-rated on questioning of
sustainability as sales increasingly migrate online. Market may not be right in the
case of Primark, however looks to be behind recent share price weakness.

[philanderer] 12/7/2021 13:59

Football fails to boost footfall: UK shopper numbers stay flat

[m_kerr] 10/7/2021 22:11

absolutely phil - and that's one of the reasons why the shares are below the sum of the parts - it reduces the possibility of a quick takeover premium of perhaps 50%. and the other is that it makes shareholder activism virtually impossible. and we all know that elliott who advocated for the breakup of GSK and whitbread, would do the same here if they could.

it's simply the wrong structure to have a solid food business, a fast-growing fashion retailer, and other assorted businesses of varying quality spanning sugar and agriculture. primark should be spun off, and with that, the lease liabilities. they should also sell the sugar business, and then concentrate on maximising returns on what's left. they would have scope to raise leverage by at least £2.5-3bn on the food / ingredients / agriculture business, whilst maintaining very comfortable interest cover and return that to shareholders.

that's what a private equity firm that makes 15-30%+ per annum equity returns would do, anyway.

[philanderer] 10/7/2021 00:50

These are the people to convince. Difficult to see it happening.

Wittington Investments owns 54.5% of Associated British Foods

Wittington is 79.2% owned by the Garfield Weston Foundation and 20.8% owned by members of the Weston family.

[m_kerr] 09/7/2021 22:02

i value the grocery business at minimum £7bn (based on £450m operating profit less mid single digit decline recently announced, multiplied by about 17 based on current valuations of comparable packaged food businesses), meaning you're getting primark, sugar, ingredients and agriculture for £10bn. valuing sugar at book value (£1.5bn), ingredients and agriculture at 8 x ebit (1.5bn), leaves you primark at £7bn. now with a bit of growth, IMO primark could be worth £20-30bn.

as i consistently have said on other boards, including whitbread and morrisons prior to the takeover offer, property, or assets that are easy to divest or raise cash against, coupled with solid operating businesses that are cash generative, plus low debt, is what private equity often end up buying if the share price is attractive enough. i see all 3 here, achievable just by slicing and dicing each business up, plus an obvious route to outsized returns if the rollout of primark continues.

[mastey] 08/7/2021 17:30

In my opinion, this fall relates to short term option trading around the effect letting the virus rip through the UK and with Europe to follow Concern footfall will drop dramatically as people take personal precautions and that means reducing trips out etc. personally I think we will see a bit of this but nothing like the market is pricing in. Expect a solid quick rebound. Am not going to buy more though as would break my allocation rules

[netcurtains] 08/7/2021 17:07

EI:
interestingly "monkey with a pin" is about the only person making money on the stockchallenge:

[essentialinvestor] 08/7/2021 16:45

Family controlling stake, short interest is usually negligible in ABF.

[netcurtains] 08/7/2021 16:18

EI:
you can short anything in this market and you will be right!
ha ha.
The FTSE100 is struggling to hold 7000.
Good luck.
Let the shorters have their day.

[essentialinvestor] 08/7/2021 16:09

May be off the market on this but to me it looks like a questioning of the
longer term Primark model, no online offering, fast fashion may be falling
out of favour etc.

That is not to say the market is necessarily right on this, etc.

[netcurtains] 07/7/2021 12:59

Indeed - I guess rain

[philanderer] 07/7/2021 12:30

Been a poor few days for the shareprice.

[tlobs2] 06/7/2021 17:38

Sell off the Primark part of the business and pay out the shareholders a huge dividend :-)

[philanderer] 06/7/2021 10:12

KEPLER CHEUVREUX RAISES ASSOCIATED BRITISH FOODS PRICE TARGET TO 2,500 (2,400) PENCE - 'HOLD'

[netcurtains] 05/7/2021 14:10

EI: I think it is. They would sell if the offer was right.

[essentialinvestor] 05/7/2021 13:51

ABF is majority controlled, it's not open to a bid.

[skinny] 05/7/2021 13:47

And it comes with a built in "sweetener" :-)

[netcurtains] 05/7/2021 13:42

I wonder if the Americans would be interested in Primark?
I think its a great brand!

[netcurtains] 05/7/2021 08:55

philanderer:
The above article is not 100% correct.
Primark do have an online presence.
Its a sort of "click and collect" approach.

[philanderer] 02/7/2021 10:51

Third Bridge sounds cautious tone on ABF


Primark, owned by Associated British Foods (ABF), may have returned to form after missing out on a boom in e-commerce during the pandemic but its lack of online presence will cost it in the future, says Third Bridge.

The high street appeared to be coming back to life as Primark added £1bn of sales in the last three months, with customers flocking to the discount fashion retailer after it was shuttered during lockdowns.

However, analyst Harry Barnick said its lack of online presence means not only does it have to ‘re-establish its leadership position in the UK fast-fashion market’ but it will also make it more difficult to capture those who have turned to online shopping.

‘Primark’;s lack of an online presence is a threat to its future growth since Covid-19 catalysed a huge jump in the number of online shoppers at the expense of the high street,’ said Barnick.

‘Primark will struggle to make its online channel work due to new costs such as returns, which can cost a retailer up to £7 per item to process, and reduced impulse purchasing. Click and collect is likely to be a first step as it is easier to manage operationally and financially.’

He added: ‘While it would be optimistic to assume profitability returns to Primark in the short-term, there are strong profitability tailwinds. For instance, rental rates could improve on new leases.’

Shares in Associated British Foods closed up 4.8%, or 107p, at £23.23 on Thursday.


hxxps://citywire.co.uk/funds-insider/news/expert-view-abf-rank-jd-sports-whitbread-rank-and-loopup/a1525808?section=funds-insider&_ga=2.258130697.2007467530.1625219308-2038248853.1625219308#i=3

[essentialinvestor] 01/7/2021 14:56

Con, the Weston family have a controlling stake, they arguably think in decades,
not so much about the daily share price.

Part of the reason for 5 years underperformance is the high multiple
ABF traded on in 2015/16 when selling at around 35x earnings.
What you have seen since is mostly multiple compression.

[philanderer] 01/7/2021 14:48

CREDIT SUISSE RAISES AB FOODS PRICE TARGET TO 2,710 (2,610) PENCE - 'OUTPERFORM'