Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Associated British Foods’ (ABF) trading update this morning gave very little new information for investors to digest since its profit warning two weeks ago.
“As a reminder, the group had a very weak Christmas performance, with total sales slipping one per cent lower to £6.8bn.
“Its low-cost Primark stores are the crown jewel of the business, but even they struggled over the festive season due to weaker-than-expected sales in Europe.
“That saw Primark only deliver sales growth of 1.5 per cent to £3.5bn.
“Sales in its grocery business were broadly flat, while its Ingredients, Sugar, and Agriculture businesses all saw sales slide lower by low-to-mid single-digit percentages.
“With profit expectations rebased below last year’s level, it looks like a low bar to hit.
“The group’s still weighing up the pros and cons of spinning off Primark, which could generate value for investors, with markets currently viewing the split-up as more likely than not.”
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