Primark and sugar will be obviously be the two quite separate talking points when investors dissect a trading update from Associated British Foods Plc (LON:ABF).
Monday’s update will fill the gaps for the whole year, ending September 10, following July’s statement covering the 40 weeks to June 18 (with the odd date cut-offs tailored to the clothing retail subsidiary).
Guidance has already outlined excuses like poor weather should numbers fall short, but, Numis analyst Charles Pick has noted that earnings beat expectations in the third quarter.
Pick thinks Monday’s will be a positive update.
“Recall that in July no material transactional effect from fx was signalled as likely for Q4 whilst with Sterling weak for most of the final 12 weeks and as 48%+ of EBIT in FY 14/15 arose from outside the UK, there will be a translational fx tailwind,” Pick said in a note.
He added that Primark, which is by far the largest earner in the AB Food business, has expanded its retail operation (in square foot terms).
Concluding, Pick said: “The shares are now trading above our TP and sentiment has become near universally favourable.
“Part of this has been due to fading fears about UK consumers ceasing to shop as much post the Brexit vote. There has also been vague chatter of a sale of ABF’s Chinese Sugar operations.”