DAVY VIEW

Associated British Foods’ (ABF) AGM trading statement strikes a constructive tone, with full-year guidance reiterated for “significant progress” in key profit measures. Trading across the food businesses is in line with expectations, with supply chain challenges offset by operational efficiencies and price actions. Trading at Primark is ahead of expectations, with improved like-for-like (LFL) revenue growth and stronger-than-expected margins. We see upside risk to our forecasts, assuming a normalized trading environment for the remainder of the year. Contrary to current equity implied expectations, we believe in the franchise value of Primark and reiterate our ‘Outperform’ rating on the stock.