The company found success in recent years thanks to its somewhat odd combination of businesses that include not only Primark but also international sugar businesses and Twining’s tea.
ABF, or more specifically Primark, has managed to defy conventional wisdom surrounding ‘the death of the high street’ by turning a profit despite the absence of an online operation, instead relying on large numbers of customers flocking to its enormous high street stores.
Given that Primark contributed over half of its profits last year, investors will be hoping the firm has managed to continue moving against the grain over the crucial Christmas shopping period, particularly with high street footfall predicted to have been much lower than last year.
There will also be interest in how Primark’s overseas expansion is progressing, with the firm due to open stores in France and Spain, while any comments on the US market will also be noted.
Wie geht in Germany for Whitbread?
The FTSE 100 firm has set out to open 20 new Premier Inn hotels by the end of the year in Germany, where analysts say there is potential to build a network as large as the UK.
German operations are “a work in progress”, according to analysts at City broker Peel Hunt, but investors should be “paying attention now”.
Meanwhile, short-term performance is the main driver of the share price, the analysts said, although “it will probably be too early for hard evidence of a bounce”.
The hotels and restaurants owner got some respite from the weak UK hotel market after the December elections, with an upgrade from Barclays to ‘overweight’ from ‘equal weight’ based on “substantial upside” being in sight based on political clarity.
The bank’s economists now expect an orderly Brexit leading to a rebound in business investment of around 3.8% next year, making the UK the fastest growing economy of those of interest to the hotels sector.
However, Peel Hunt expects an update on this front in the fourth quarter. “As the UK general election took place during the quarter, it might be too early to see whether business confidence has been restored and the recent dip in bookings reversed,” analysts said in a note.
Thursday January 16:
Trading announcements: 4imprint Group PLC (LON:FOUR), Associated British Foods PLC (LON:ABF), Bakkavor Group PLC (LON:BAKK), Dechra Pharmaceuticals PLC (LON:DPH), Hays PLC (LON:HAS), Halfords Group PLC (LON:HFD), Ibstock Plc (LON:IBST), John Wood Group PLC (LON:WG.), Marshalls PLC (LON:MSLH), N Brown Group plc (LON:BWNG), Pearson PLC (LON:PSON), Rio Tinto plc (LON:RIO), Whitbread plc (LON:WTB), Workspace Group plc (LON:WKP)
Interims: Theworks.co.uk PLC (LON:WRKS),
AGMs: Mineral & Financial Investments Ltd (LON:MAFL)
Economic data: UK RICS house prices, UK BoE credit conditions, US retail sales, US Philly Fed manufacturing index