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Primark trading ahead of expectations says AB Foods (ABF.L)

By Adrian Holliday

08:17, 10 December 2021

Photo of Primark store in a shopping centre
A European Primark store shop front – Photo: Shutterstock

In a fresh trading update, Associated British Foods (ABF.L) says its fashion retailer Primark arm has seen better like-for-like sales compared to the same quarter last year, helped by pandemic-related store openings.

The sugar-to-fashion group also said it anticipated “significant progress” for adjusted operating profit and earnings per share for the half and full year.

ABF shares opened at 1,925p and inched up to 1,941p in early morning trading. This share price remains substantially below its 2,528p year high. Associated British Foods annual general meeting is scheduled for today morning. 

Enough stock for Christmas

Primark has 400 stores across Europe and US and says supply chain disruption has been managed by prioritising products most in demand with the support of logistics partners.

“We have stock cover on the vast majority of lines for the important Christmas trading period.”

The public health measures “taken to date in our markets are mainly restrictions in trading hours in the Netherlands, the requirement for vaccine passes in Germany and the closure of our five stores in Austria”.

Primark, like other retailers, remains vulnerable to government policy change as the Omicron variant spreads.


0.61 Price
+0.710% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168


37,270.30 Price
+0.540% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00


15,955.90 Price
-0.040% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8


2,014.89 Price
+0.050% 1D Chg, %
Long position overnight fee -0.0194%
Short position overnight fee 0.0112%
Overnight fee time 22:00 (UTC)
Spread 0.30

Price hikes pencilled in

Trading across grocery, sugar, ingredients and agriculture is in line with expectations, AB Foods added. 

“We are experiencing the impact of widely reported port congestion and road freight limitations and our businesses have been working hard to overcome these difficulties.” 

AB Foods also said that it has seen an escalation in energy, logistics and commodities costs “and we have been implementing plans to offset these through operational cost savings and, where necessary, the implementation of price increases”.

‘Significant progress’

Taking all these factors into account, “we continue to expect significant progress, at both the half and full year, in adjusted operating profit and adjusted earnings per share for the Group”, the company said this morning.

Primark has opened two new stores, one in Vigo, Spain, and one in Catania, Italy, bringing its total trading estate to 17m square feet.

Sales in some parts of Europe have been previously hit by a lack of tourism though Primark has also had lower staff cost pressure to bear.  

Read more: UK GDP still below pre-Covid levels, ONS figures show

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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