Shares of Associated British Foods PLC (LON: ABF) have slipped about 4% in today’s trading session after the company said it will incur losses of £375 million due to the temporary closures of its Primark stores
Governments across Europe were forced to order closures of non-essential businesses across Europe amid the rapidly surging number of new Covid-19 infections.
ABF says that all stores in France, Belgium, Republic of Ireland, Wales, Spain and Slovenia are temporarily closed as of today.
These markets represent 19% of the firm’s total retail selling space. In case the UK Parliament approves the temporary lockdown measures, this number will rise to 57%.
Two months ago, ABF said its net cash before lease liabilities stood at £1.5 billion.
“The group’s food orientated operations could benefit from consumers being stuck at home again, opting for trusted brands, but ABF’s substantial cash pile will come in very handy if Primark’s business takes this big hit,” analysts at Hargreaves Lansdown wrote.
ABF share price slipped over 4% this morning before recovering half of these losses to trade at 1663p, or 2.02% in the red on a day.
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