The ABF share price (LON: ABF) (ABF.L) has declined by 5% in the past month. By contrast, the FTSE 100 index (INDEXFTSE: UKX) has increased in price by around 3% in the same period.
During the past month, the company released its interim results on 20 April. They showed a fall in revenue of 18% at constant currency. Its performance was negatively impacted by Covid-19 and the lockdown measures that have been put in place in many of its end markets.
Sales within the firm’s grocery, sugar, agriculture and ingredients segments were ahead of the prior year’s figures at constant currency. Furthermore, adjusted operating profit in each of these food business areas was ahead of management expectations and the previous year’s performance. In aggregate, adjusted operating profit was 30% higher than last year.
ABF’s retail segment, Primark, experienced materially lower sales versus the previous year as a result of trading restrictions caused by Covid-19. However, the company says it has seen encouraging levels of trading since the retailer’s stores have been reopened.
ABF’s adjusted operating profit was 46% down on the previous year’s figure largely due to the impact of Primark. The cash outflow for the firm during the period was £860 million. A major part of this was a cash outflow of £650 million relating to Primark’s loss of revenue and consequent increase in stock.
At the end of the period, the company had net cash before lease liabilities of £705 million compared to £801 million at the same time last year. It declared an interim dividend of 6.2p per share that will be paid on 9 July to shareholders registered on 4 June.
The company stated in its results that it expects a softer performance from its grocery, sugar, agriculture and ingredients businesses in the second half of the year. It expects that profit for Primark for the full year will be lower than the previous year, while it forecasts nine store openings in the second half of the year.
Over the past year the ABF share price has risen by 36%. Over the past five years it has declined by around 22%. The FTSE 100 has made a gain of 20% in the past year, while it is trading around 16% higher compared to its level from five years ago.
The ABF share price currently trades at 2350p at the time of writing. According to the company’s financial calendar its next investor update is due to be a trading statement on 1 July.
Not Investment Advice
Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.