Primark sales soar sending stock to all-time high

Primark sales soared after Christmas, boosted during the festive period as per to add a 25 percent in a performance that owner Associated British Foods called “outstanding”. Consequently, the stock rocketed. Hitting an all-times high.

Shares at ABF, parent company of Primark, rose 83 pence, or 5 percent, to an all-time high of 1639 pence. The news sent the group's share price 7.5 percent higher by mid-afternoon trading in London, before it fell back to end the day's trading at 3.2 percent.

Demand for Christmas jumpers and the popularity of all-in-one pyjamas, known as 'onesies', helped drive sales, reported the ‘Daily Mail’.

As stressed by both Primark and the analysts who follow the stock, trade at its Primark stores was more intense than expected, which contributed to a better operating profit margins than a year ago.

´The Courier´ gathered Graham Jones´ comment (from analysts Panmure Gordon)on Primark´s performance: “stunning growth”. “The focus for investors, in our view, should be how to value Primark within the ABF group. Our sum-of-the-parts models assigns a value to Primark of 7.78 billion pounds, and drives an increase in our price target from 1,450 pence to 1,670. Even after the stock’s strong run this implies a further 9.4 percent total return over the next 12 months, and in our view ABF should be a core holding in the sector.”

When presenting the figures earlier this week, the company´s Finance director John Bason said: “I don’t use that word lightly but for many, many years I have not seen growth like that at Primark.” “Not only did we see a great improvement on the top line, we also saw an increase in profit margins as cotton prices fell,” Bason added.

Primark said that it increased its selling space by 14 percent with 14 new stores. Analysts said that sales in shops which had been open for at least 12 months were up by some 9 percent. The last three months saw 14 new stores open, 10 of them on continental Europe, the firm said, taking its total number worldwide to 256.