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Associated British Foods has announced it will reopen the last of its Primark stores - including those in the US - by late June after it was forced to close its 378 retail locations across the world due to the coronavirus pandemic.
The closure of all stores in March, resulted in a £650m loss in sales for every month they were shut, ABF said. To reduce the cash outflow resulting from the sales loss, ABF cancelled future orders where possible and implemented measures to reduce operating overhead while the stores were closed, such as accessing the government’s employment retention schemes across Europe.
The company is also in discussions with landlords to renegotiate some of the terms in its lease arrangements.
As stores started to reopen across Europe - UK locations will start trading on June 15 - social distancing protocols, hand sanitiser stations, perspex screens at tills and additional cleaning of high frequency touch points in the store were implemented.
Primark is now trading from 112 retail locations, 34% of its total selling space.stores which represent 34 percent of our total selling space.
From the stores that have already been reopened - including those in Austria, Germany, Italy, France and Spain - early trading indicators were “reassuring and encouraging” with customers queues outside most stores and, once in store, spending on larger basket sizes, the company said.
However, cumulative sales since re-opening, on a like-for-like basis, were down on the same period last year as stores located in big city centres suffer from a lack of tourism and lower commuter footfall.
Meanwhile, ABF’s grocery operating profit is expected ahead of previous expectations due to higher dales of branded products through the retail channel, offsetting weaker foodservice sales.
The company maintained production at all of its food business facilities, despite the operational challenges arising from Covid-19.
However, AB Sugar is expected to report lower profits following further disappointing performance at Illovo.
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Fuller, Smith & Turner has announced it decided to access the Covid Corporate Financing Facility for an initial £100m due to ”continued uncertainty” as to when pubs will be allowed to reopen.
This will enable the company to leave the majority of its £155m revolving credit facilities undrawn and will put Fuller’s in a strong position with significant liquidity headroom to successfully navigate the months ahead, the company said.
“This, together with the action outlined above relating to the additional liquidity reserves being put in place, further underpins the board’s confidence that Fuller’s has sufficient liquidity headroom to sustain the company through this period of continued uncertainty,” the business added.
The FTSE 100 opened up 1.5% at 6,169.19pts.
Risers saw McBride open up 14% at 65p, Nichols up 4.6% at 1,308p and ABF up 5.8% at 1,927p.
Fallers included Applegreen down 1.7% at 314.35p, Cocal Cola HBC down 1.1% at 2,016p and Bakkavor down 0.6% at 77.55p.
This week in the City
This week is due to be another quiet one in the City.
Wednesday sees the publication of SSP Group’s interim results after a torrid time for its shares in recent weeks. Also on Wednesday, beverage firms C&C Group and Distil are in the diary to announce full year results.
On Thursday FeverTree will hold its annual general meeting.
Internationally, Campbell Soup Co has its third quarter results on Wednesday, while Thursday brings full year earnings from Saputo and Remy Cointreau.
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