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And buying a 9% gap up normally results in buying a spike - certainly on a ftse100 but let's see.
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Be interesting to see how this impacts Primark / ABF.
Choo Choo goes the ABF train, topped up below 2000 again - what's not to love
The discount fashion retailer withheld a reported £33m of quarterly payments due to landlords
The discount fashion retailer withheld a reported £33m of quarterly payments due to landlords
Primark is paying rent to a select group of landlords, but has forced them to sign gagging orders — after it refused to pay millions of pounds to others.
In March, the discount fashion retailer — owned by Associated British Foods, backed by the billionaire Weston family — withheld a reported £33m of quarterly payments due to landlords, the day after it shut 376 stores across 12 countries due to Covid-19, including 189 in the UK. The company, which pays about £125m rent a year, announced that for every month of closure, it would lose about £650m in sales.
Primark, which plans to reopen stores in the UK from June 15, has been in talks with landlords and is understood to have agreed rent payments
Good, Primark beginning to open, life will start going back to normal, shopping resumes etc.
Good rise so far today, should see this returning to back normal level in the near future. GLA.
Announced today, all Primark stores hope to be open in June. Here we go.
Old link, unfortunately - potentially some more definitive news this week post PM's announcement.
If Matalan can open why can't Primark?
ABF is a very well diversified company and apart from Primark, has many many many additional businesses that are running/performing as normal (if not better in most of the food related businesses); as highlighted by others here, ABF has an excellent balance sheet which will additionally help place Primark in a prime position post lockdown period which has already begun in some countries.
Oasis and Warehouse in administration.
Kath Kidston gone.
Laura Ashley.
Debenhams gone.
Primark will be the only clothes store left at this rate.
They have the money in the bank to survive.
I have joined you today. Agree that it is when not if primark bounce back.
Upside potential in the ABF SP is now way way too big to ignore, staying long here ALL the way.
Unless there's a second wave of the virus that keeps Primark shut longer. In which case the upward move may take longer / be slower.
But it's still coming. Just don't want anyone to be discouraged if it takes longer than expected, we're still on a winner here.
No doubt that ABF SP is currently extremely undervalued and huge upside potential is clearly here going forward. ABF is diversified, efficient, very well managed, and present SP IMHO already reflects any and all possible worst case scenarios! ABF businesses barring Primark have all been performing as normal (if not better in some cases), and now as Primark stores begin to slowly re-open, we should soon see a massive and ongoing upward move in the ABF SP.
GLA
https://www.cityam.com/shakespeare-primed-and-ready/?utm_source=dlvr.it&utm_medium=twitter
Make that two £1m buys
Some serious buying going on today. £1m purchase earlier on and buys outweigh sales by 2 to 1.
Probably time to do a deal. Intu probably needs it more than ABF right now.
https://www.bbc.co.uk/news/business-52704216
Agreed, ABF is crazy undervalued at present but markets are like this and bargains are there at limited times IMO, I strongly expect huge upward moves lie ahead here; solid company, well diversified, efficient, and very well managed with great balance sheet, nothing to dislike and certainly no reason for the current massive SP undervaluation!
GLA
ABF SP will likely move up significantly from here and I expect very soon, it is probably one of the most undervalued stocks in the FTSE today based on present fundamentals IMO (even including some of the most pessimistic Primark related scenarios). Although I don't rely on broker ratings but within the retail sector analysts, I like Morgan Stanley and ABF is also now one of their top picks with a 2800 PT (link below FYI) representing ~65% upside from current SP levels.
https://www.***************************/associated-british-foods-plc-61-8-potential-upside-indicated-by-morgan-stanley/412820343
https://www.retailgazette.co.uk/blog/2020/05/primark-superdry-eu-store-reopenings-may-offer-clues-in-customer-behaviours/
Footfall down, basket sizes larger. Not surprising, people will shop less often and look to plan their shopping trips to buy more of the things they need in one visit.
"Is it really being savvy though to be reneging on its contractual obligations with landlords and say suppliers."
This is a good and fair question.
In my view, they've treated their suppliers pretty well.
Also in my view, their landlords have been giving many breaks to less well-run companies for a couple of years. A company gets in trouble, the landlords give them a rent reduction to keep them afloat. A well-run company can legitimately ask, if you are going to subsidise those who don't manage their business well, why are we not eligible for the same subsidy? They did ask those questions, but didn't get too far with it.
Now, Primark is losing money, too, not for any fault of their own or because of poor management. So, if you subsidised others who were losing money, can we not also negotiate a better deal now that we are losing money?
I believe it is legitimate to take that approach. I assume that an agreement will be reached, and that some of that rent will be paid. But I don't have see any moral objection to the approach they are taking. It is not as if other tenants have not received rent breaks, they have.
ABF SP is currently way way way too undervalued IMHO and has huge upside potential available going forward. It is a very diversified, efficient, and well managed company which should be extremely rewarding to it's investors over time (one of the most undervalued FTSE stocks at present, IMO).
GLA