Associated British Foods (GB:ABF) announced changes to its finance department last week, as inflation continues to rise. The company has hired Eoin Tonge as its new finance director. Mr. Tonge joined the company from rival retailer Marks and Spencer (GB:MAKSY), where he had worked as a CFO for the last 2 years.
He will succeed John Bason, who served as ABF’s finance director for almost 20 years. Mr. Bason will stay with the company until April 2023 to ease the transition process.
Further in his journey, Mr. Bason will head the newly formed strategic advisory board as a Chairman and will serve as a senior adviser to Primark.
Better strategies in place with the new advisory board
The new board is designed to help Primark’s top executives as they continue to work on the company’s expansion in the U.S., in locations such as Philadelphia and New York. As of now, Primark is mostly concentrated in the UK and Continental Europe.
Mr. Bason said, “It is my responsibility to really bring together the people with expertise in each of these areas and then channel that so that the appropriate level of support is given to the Primark executive team.”
The board will also work towards establishing a better online market for the Primark stores. Primark stores’ revenues were hit hard during the pandemic as the company didn’t have any online presence.
Also, as part of its digital transformation, it launched its website as a trial in the UK market. The website shows many products and their stock availability by store.
View from the city
According to TipRanks’ analyst rating consensus, Associated British Foods’ stock has a Hold rating. The stock has ratings from 13 analysts, out of which eight are Hold, four are Buy, and one is a Sell recommendation.
The average price target is 2,020p, with an upside potential of 19.1%. The analyst price targets range from a low of 1,670p to a high of 2,500p.
Warren Ackerman of Barclays recently reiterated his Buy rating on the stock. His target price is 2,300p, which is 36% higher than the current price.
Conclusion
Further expansion in foreign markets as well as development of its online marketplace will help drive the top line growth for Primark.
With the new changes in leadership, the company will also be able to mitigate the impact of inflation and control its rising costs. Primark is on track to deliver an adjusted operating profit margin of around 10% in FY 2022.
