SHARE OF THE WEEK: All eyes are on Primark results

With Marks & Spencer seemingly getting its mojo back, the owner of Primark will reveal how it is faring when it delivers its latest update next week.

Associated British Foods, which owns a host of brands including Silver Spoon, Ryvita, Kingsmill and Twinings, as well as the High Street fashion chain, has seen its shares rise 25 per cent this year and nearly 60 per cent since its lows in September last year.

So investors will be hoping for further cheer at the full year trading statement on Tuesday.

After an upgrade to the outlook at the third quarter update in June, City analysts have pencilled in annual profits of £1.47billion, up slightly from the £1.4billion it made a year earlier.

Revenues are expected to have risen 17 per cent to £19.9billion.

But, according to Russ Mould at investment platform AJ Bell, ‘any guidance for the fiscal year to September 2024 is likely to be even more important’. Profits are expected to rise to £1.65billion next year with revenues nudging up to £20.8billion.

Primark, as ever, is likely to grab most of the attention, and trading in the first half was better than many thought it was going to be as shoppers continued to splash out. Having said that, customers, analysts and investors alike will be keen to see how much further Primark plans to raise prices to protect margins as the cost of doing business soars.

‘Management does not wish to push pricing too far,’ Mould said.

There will also be interest on in the High Street retailer’s move into click-and-collect as the company dips its toe into the world of online retailing.

The stores remain the bread and butter, however, and the chain is expanding across Europe and into the US.

Aarin Chiekrie, equity analyst at investment platform Hargreaves Lansdown, says cash flow will also be crucial as it will ‘likely have a direct impact on the group’s ability to fund future dividends and share buybacks’.

‘No shareholders returns are guaranteed,’ he adds.