Primark’s low-cost offering appears to be a hit with customers in the current environment. Margins have been better than expected and they’ll be upheld by an easing of costs in the second half of the year, despite an expected softening of sales. That all provides a healthy basis for the company to launch an expansion in to the southern states of the US, announced today.
(Bloomberg) — Primark’s low-cost offering appears to be a hit with customers in the current environment. Margins have been better than expected and they’ll be upheld by an easing of costs in the second half of the year, despite an expected softening of sales. That all provides a healthy basis for the company to launch an expansion in to the southern states of the US, announced today.
Here’s the key business news from London this morning:
In The City
Associated British Foods Plc: The company will expand Primark stores into the southern states of the US, including Texas, and has begun construction of a distribution center in Jacksonville, Florida.
- The low-cost outfitter’s margin was better than expected in the first half of the year, and the company said lower freight and energy costs should help keep profitability at that level
Whitbread Plc: The company’s performance has grown to exceed pre-pandemic levels, driven by popularity of Premier Inn in the UK.
- The hotel and restaurant group will buy back £300 million shares in the first half of the year, reflecting the “confidence in outlook,” it said
AIB Group Plc: The Irish bank has agreed to buy more than €215 million shares from the Irish state, bringing the country’s holding in the company to just over 53%.
Centrica Plc: A shareholder sold 150 million shares in the British Gas-owner overnight at a price of 110.15 pence per share.
In Westminster
The UK’s borrowing came in £13.2 billion below official forecasts last fiscal year, giving the chancellor headroom for more spending ahead of the next general election.
Big Tech firms from Google to Meta Platforms Inc. face beefed up oversight and potential fines of as much as 10% of global sales for practices that hurt consumers, under sweeping new legislation set to be unveiled today by the UK government.
Meanwhile, Bloomberg Opinion’s editorial board lays out why Britain “might need a recession to beat inflation.”
In Case You Missed It
The number of job seekers in the City of London increased in the first quarter of 2023 even as the number of open positions fell by almost a third, underlining the tough job market for bankers amid economic uncertainty and the threat of redundancies.
Meanwhile, the politicization of the acronym ESG risks overshadowing its power to drive returns for shareholders, according to the head of investment stewardship at the UK’s biggest asset manager, Legal & General Investment Management.
Looking Ahead
Tomorrow we’ll get results from pharmaceutical giant GSK Plc, consumer product maker Reckitt Benckiser Group Plc and emerging markets-focused lender Standard Chartered Plc.
Exposure to commercial real estate in China is still a “thorny issue” for Standard Chartered, with expectations for the bank’s first-quarter loan-loss provision looking “potentially too light,” says Bloomberg Intelligence’s Lento Tang.
Standard Chartered executives are also sure to be quizzed about any potential M&A plans. Bloomberg reported in February that First Abu Dhabi Bank PJSC was pressing ahead with a potential offer for Standard Chartered after it had put earlier takeover plans on hold. The cooling off period during which FAB must wait before it could make a bid expires on July 4.
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