Primark owner Associated British Food (LSE: ABF) soared up over 9% in early trade this morning, following the company’s announcement that Primark is to open stores in the north-east of the USA towards the end of 2015.
Primark has been the jewel in ABF’s crown for some time now, and the fashion industry continues to be both lucrative and competitive — so “up-to-the-minute fashion” at “value-for-money prices” is a winning combination.
While Primark has rolled out successfully across nine countries in Europe, the planned opening in Boston, Massachusetts marks the first time ABF has attempted to expand into another continent.
Elsewhere in today’s news from ABF, the company revealed that adjusted pre-tax profit rose 4% to £468m in the 24 weeks ended 1 March 2014, leading to a 10% jump in adjusted earnings per share to 45.8p despite group revenue falling 2% to £6,206m.
Chairman Charles Sinclair stated that the strengthening of sterling and much lower sugar prices contributed to ABF’s positive half-time results, on top of “strong performances from Primark and Grocery, an encouraging improvement at Ingredients and a lower interest charge”. Shareholders will be also pleased with a 4% increase in the interim dividend to 9.70p per share, putting ABF on a forecast yield of 1.3%.
Additionally, former Shell executive vice-president of strategy & planning Ruth Cairnie has been appointed as a non-executive director at ABF with effect from 1 May 2014.
Shares in Associated British Foods have risen more than three-fold in the last five years, from a low of 820p in 2010, and today’s price rise leaves it just short of its 2014 peak of 3,027p.
