Scancell founder says the company is ready to commercialise novel medicines to counteract cancer. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
"and as the saying goes no- one ever made money by overestimating the intelligence of the public."
Indeed. But there's another factor, and that is in a charitable role I have contact with a lot of lower income people. There are a lot of people who simply have a difficult time coming up with the funds to buy higher quality items. Even if they know it is better, they lack either the resources or the self-control to put themselves in a position to do that. It's not necessarily lack of intelligence, it's other problems, unfortunately. Those people will always want a Primark-type source.
I also think pensioners don't tend to put tremendous wear and tear on their clothes and for many, the cheaper option might be better. So an aging population may keep Primark profitable longer than we might think.
I think you are correct that the UK expansion prospects are limited. I think there's decades worth of room for expansion in Europe and the US, however. In the US, Walmart is already in that space to an extent, so it may not go as well there as here, but I still think it will succeed -- Asda hasn't put a squeeze on Primark here, particularly.
I'm interested in Renewi. I'm not in yet but I think you might be on to a winner there. I don't think they are mutually exclusive investments in any respect.
The share I have recycled into should read Renewi
Your argument might be valid if there was no alternative to cheao poorly made, short life items.
But there is an alternative..more expensive items which are replaced much less frequently, so the long term cost can be the same ,or less.
However I will say that my analysis does depend on a modicum of intelligence from the general public....and as the saying goes no- one ever made money by overestimating the intelligence of the public.
You may also like to reflect that as more stores open they are taking sales from existing stores.
When there are stories all over Europe you will no longer find coachloads of tourists and day trippers from the continent carrying Primark items back home,because they will have a local store.
As you say time will tell and I already have recycled my ABF proceeds to invest in RNWL a recycling company and luckily this is already showing a healthy profit.
Ever heard of debt? The UK, Europe, and the US are swimming in it, individuals, corporations, local authorities, and central governments. Loads of lovely (NOT) debt.
That catches up with people, and when it does, they will be looking for lower cost items, even if the quality is lower. Clothing is an essential, and if you are trying to make benefits, meager savings, or low pension income go further, you look for inexpensive clothing. Even if the cool kids ranting about climate change don't like it -- if you don't have the money for something cheaper, you don't have it.
Aging population, too, more and more pensioners on fixed incomes trying to stretch them.
I agree that the current climate change rage is detrimental for ABF. But there's other dynamics at play that, IMO, outweigh that. Your view may differ and that's fine. If you are right, I'll lose money, if I am right you've passed on an opportunity. We'll find out in the coming years.
Have holders of this stock heard of climate change?
The tide is turning against buying large numbers of low quality items. made from artificial fibres and in addition further sugar taxes may impact the other arm of ABFs business
For this reason I have disposed of my entire holding and taken profits as it had I'm my opinion become too high risk.
It's only matter of time before this company runs into trouble, I didn't want to play chicken and try and jump out before the crash.
Considering how other retailers did over Christmas, I'll take it. The Primark approach to retail is still working. And sugar is recovering. Still pinning a lot of my hopes on the US expansion for this one.
Yeah, I've decided to stick with it, too. Could have taken a profit but I still think there is significant upside here. High hopes for Primark US expansion. Also I expect sugar division to improve substantively. I also think the pound strengthening helps ABF and that once Brexit is done and a couple reasonable trade deals in place the pound will strengthen. Might take 18-24 months for that but I can wait.
I have just taken a position for the long term
Well, I was betting this would go up with the political situation sorted out. Have to decide now whether to hold for longer term, or at what point it is time to take profits. I still think there's more to gain on it.
Would be interested to hear why. Profit growth despite the decline in L4L at Primark, which we knew about, the bottom falling out of the sugar market this year, and the historically low pound. This coming year's sugar results should be at least marginally better than this year, and the pound is also likely to be stronger over the course of this year than it was last year.
What specifically concerned you about the results? The market seems happy with them this morning.
Personally thought the results were pretty poor. In bubble territory now. Time will tell.
If the political situation straightens out and the pound strengthens, this will go well, I think.
L4L at Primark down 2% being blamed on local issues in Germany, new local mgmt in place. Will see how that goes.
I see no reason to sell this, might add in coming days.
Sadly SP back down to January's 2160 levels. Any bounce has very much failed and direction is definitely heading down now. To think these were £34 just two years ago. Still, good to see Steve Bruce get his first win against Man Utd after 22 attempts.
Mike Ashley ? How's he doing lately with Newcastle United and Debenhams? Food and utilities are defensive but not fashion retail. High Street is dying ... been out lately?
Food shortages possible if no deal Brexit - don't like the sound of that Dougie. Mike Ashley saying last night on the news that you don't see Primark, TKs etc. pulling out of the High Street at least I think that's what he was saying. Could he not afford elocution lessons.
I'm curious. In your years of watching this company, have you noticed any correlation between employment levels and Primark performance in LFL sales?
US market is huge.
I view this as an unusual opportunity to hold a defensive share that should do reasonably well in a downturn (food is still food, after all, and cheap clothes look more attractive when you don't have money), but that also has a significant potential upside in the US expansion.
Sounds like you just see downside for the company. Care to comment on the flaws in my logic?
WARNING : January 2014 the SP was 2590. I know coz I sold them then. Been in and out since then ... buy low sell high, etc. Days of £36 long gone. Historically they're on a 5 year downturn. They are still overpriced right now and 2000p would be fair price for a company who can't grow LFL sales. I will dip back in at that level. No, it doesn't make sense to open new stores - the initial risky overheads are massive and then you're into a cycle of declining LFL sales. Also online clothing retail is predicted to double in next 5 years . Go figure ... Primark will be left with a load of empty units.
LFL sales being down isn't news, we knew about that already. Primark has never really been about being cool, but being cheap. It's been the place to go when you are trying to keep costs down because money is tight. In that regard, ABF is a good defensive share in a recession -- when people lose their jobs, or think they might, they don't want to spend £30 for jeans when they can get them for £5.
IMO the reason LFL sales are down is because unemployment is low and has been low for long enough that a lot of people are more secure in their jobs and less concerned about saving every pound. I don't think it is that Primark has lost the market, certainly not permanently. And it certainly does make sense to keep opening new stores, even if LFL is down marginally, as long as they are profitable, which they are.
LFL sales are down. It's a worrying sign when customers no longer want your £2 T shirts, £5 jeans and £10 jackets. Fashion is all about brands and the young feeling/looking cool. Primark's been in decline for a few years now ... can't keep opening new stores when LFL is in decline - just doesn't make sense. SP is under pressure and will go down more IMO.
Not sure why the drop in share price. Seems like the bad news (like-for-like sales at Primark down) is hardly surprising, we knew it already. Everything else seems reasonably good.
Nothing here that would change my overall view.
https://www.ft.com/content/7ee8c2c6-b136-11e9-8cb2-799a3a8cf37b
Anything gained here is pure profit, of course. And locking in longer leases carries some risk but also locks in the low rent for a long time. This seems a very good move.
Not sure I have any 'words of wisdom' but I'll comment.
If you think a share is going to go, a downswing in price is good, you can buy cheap. I jumped in a little too soon, but I think in the long run I'm going to be happy anyway.
So, what's holding it down? Well, first, it was overpriced for what it IS. There's premium built into the price based on what people think it will, or might, be. If Primark goes big in America, it will be extremely valuable. So maybe some sentiment is now less positive about that. Even at today's SP, the price to earnings ratio is still at 17, and divi around 2%, hardly attention grabbing, especially with UK shares perhaps undervalued generally. I wouldn't touch it if I didn't see significant potential for growth here. I didn't buy for what it is but for what I anticipate it to be.
So, it's a growth stock. I suspect general market sentiment over Brexit and recession fears is hurting growth stocks more than others. I think that's a factor.
I also am sure like-for-like sales at Primark being down is not helping. You can only open so many stores, and once you hit that limit if like-for-like sales stay down, then revenue will drop. I'm not persuaded they will stay down.
I think another factor is concern about whether Primark will be as successful in America as here. Walmart has some cheap clothes. The American clothing market already has some inexpensive options. Is it really going to work phenomenally, or will it be good but not great, or will it flop? I don't think it will flop but no one really knows.
The pound's weakness may not be helping that much either. I suspect ABF imports more than it exports, so a low pound hurts. If that's the case, part of the price may be due to no-deal Brexit pessimism and the anticipated hit on the pound. It's anyone's guess what happens with Brexit, of course. I'm expecting no-deal, and expecting it to affect the pound but not disastrously, but within a year or two to see a recovery.
My opinion only, which may not be worth anything -- I'd say if you aren't prepared to ignore the share price for 1-3 years it may not be the investment for you. Likewise, if your risk tolerance is low. I think there's significant upside but I'm not in very heavily here, because I do see some risk that the upside never materialises. I don't think the downside is as high as a lot of 'growth' companies, either. They'll keep producing food and it's one thing people have to keep buying. So I doubt you'd lose a lot of your money, but if the upside doesn't come, you might lose a little bit of it, and you might have lost the opportunity to buy something better.
For me, the risk is worth it. In fact, I think I'm likely to wish I'd bought more. But that will be hindsight.
The word around ABF seems good, with Primark forging ahead on profits and sales, and a positive Trading statement 4/7/19 confirming US business and activities remain positive. Any loss from Sugar is supposedly factored into the 1H19 results and better performance is forecast 2H19 / FY. Hargreaves Lansdowne shows as Very Strong Broker Buy and many have revised their target to a range of 2900-3400p. So, with all this positivity, why the poor share price and why is it enduring continuous slides. It could dip below 2300p in next few days (appreciate that it has recently gone ExD). Does the 2.1 Divi Yield put investors off, or is their some worry that Primark, the Jewel in the Crown, may be broken out of the ABF share price and be a stand alone share? As someone keen to add ABF to my small portfolio, the price slide against the positives confuses me. Any words of wisdom?
https://www.standard.co.uk/business/primark-beats-high-street-slump-and-steps-up-its-us-invasion-a4182311.html
I've seen this for some time as a nice hedge against Brexit. If we do get a no-deal Brexit, and if it does turn out to be damaging (I'm not persuaded it will happen or be that damaging if it does), I think ABF is likely to do relatively well anyway.
Better than expected. I'm in this for the long term but nice to see it do reasonably well short term, too.