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Associated British Foods pleases investors with strong Q3 performance
As Associated British Foods ABF reports encouraging Q3 results Sheridan Admans, investment research manager at The Share Centre, explains what they mean for investors.
“This morning ABF reported very encouraging results as expected. Sugar revenues have improved and we expect there to be further improvement in this part of the business in the second half of 2012 as sugar prices continue to fall.
“Primark, ABF’s discount clothing retailer, had strong growth across its European operations. Even in these uncertain times, with the impact of the debt crisis and increased cotton prices, growth was a stellar 16% year on year for the quarter. We believe cotton prices will be weaker and help profit margins improve in the latter part of 2012.
“Investors will be pleased to hear that revenues also increased in the company’s other divisions, agriculture, groceries and ingredients, helping contribute to the group’s overall 12% top line growth.
“We continue to recommend ABF as a ‘buy’ for investors on the expectation that low priced clothing brands are likely to be more attractive in these tough times and particularly as Europe and UK are currently heading towards recession. We also expect to see profit margins improve as commodity prices are expected to weaken throughout 2012.”
THIS DATA IS PROVIDED BY THE SHARE CENTRE. THIS IS NOT INTENDED TO CONSTITUTE AN OFFER OR AGREEMENT TO BUY OR SELL INVESTMENTS.
Risk Warnings:
Investing in general, and the products and services mentioned above may not be suitable for all: if in doubt, individuals should seek independent financial advice. The value of investments and the income from them can go down as well as up and investors may not get back their original investment. Past performance is not a reliable indicator of future performance.
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Back2012-01-19 11:37:15 © Moneyextra.com