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Associated British Foods is one of those companies whose shares often quietly move higher, usually when no-one is looking. Today it has jumped 6% after another excellent set of numbers.
The company’s roots might lie in foods, and these still form a crucial part of the business, but it is the high street clothier Primark that is driving the company forward. After a difficult winter, when extended cold weather kept British shoppers indoors, the warmer weather has proved to be a boon, with sales up 20% for the quarter and 22% for the year so far. This is far in excess of all other divisions, and with the weather still very pleasant Primark will be hopeful of further strong sales in the weeks to come.
Overall revenue is up 9% so far this year, and full-year expectations remain unchanged following today’s numbers. In addition, ABF expects to make further reductions in net debt as the year goes on.
The shares have gapped higher today, taking them above £19 per share for the first time since the end of May. This puts the long-term uptrend firmly back in focus, but a degree of profit-taking would not be surprising over the next few days.