Interactive Investor

ii view: Primark owner AB Foods sweetens outlook

28th June 2023 15:38

by Keith Bowman from interactive investor

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Pushing an online offering for Primark and with food brands including Ryvita and Twinings. We assess prospects.


Third-quarter trading update to 27 May

  • Retail or Primark revenue up 13% to £2 billion
  • Total food related revenues up 18% to £2.73 billion
  • Overall group currency adjusted revenue up 16% to £4.73 billion
  • Completed £319 million of its £500 million share buyback programme


  • Now expects full-year adjusted operating profit to be moderately ahead of last year, up from broadly in line previously

ii round-up:

Associated British Foods (LSE:ABF) operates across the five divisions of grocery, sugar, agriculture, ingredients, and retail. 

Its retail business Primark is located in the UK and Ireland, much of Europe and parts of the USA. 

Brands for its food businesses include Kingsmill, Ryvita, Allison’s, Twinings, Silver Spoon, Jordans and Dorset cereals, Patak’s, Rajah’s and Blue Dragon.

For a round-up of this latest trading update announced on 26 June, please click here

ii view:

Founded in 1935, AB Foods is today a multinational food processing and retailing business headquartered in London. Primark competitors include Tesco and Sainsbury's selling their own clothing ranges, and the likes of Next (LSE:NXT) and Marks & Spencer Group (LSE:MKS). Food sector rivals include Premier Foods (LSE:PFD) and Tate & Lyle (LSE:TATE). A constituent of the FTSE 100 index, AB Foods employs over 125,000 people in more than 50 countries. Recently opened Primark stores include Venice in Italy, its first store in Slovakia, and Toledo in Spain. 

For investors, the tough economic backdrop including rising interest rates continue to threaten consumer spending. Costs generally for businesses remain elevated, food production such as sugar can prove vulnerable to the weather, while Primark’s lack of a significant online presence over the course of the pandemic contrasts with that of clothing rivals such as Next.

On the upside, product price rises across the company appear not to have affected volumes, with full-year adjusted profit now expected to be marginally higher than last year. New Primark stores continue to be opened, the company is diversified across both business type and geography, while action is being taken to bolster Primark’s online presence. 

On balance, and while the group’s exposure to consumer spending offers room for caution, its relatively defensive offering of food and budget clothing is likely to keep investors happy. 


  • Diversified business type and geographical footprint
  • Expanding Primark store numbers


  • Uncertain economic outlook
  • Many factors outside of its control like food commodity prices and currency moves 

The average rating of stock market analysts:


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