LSE:ABF

Stock Analysis Report

Executive Summary

Associated British Foods plc operates as a diversified food, ingredients, and retail company worldwide.

Snowflake

Fundamentals

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Associated British Foods's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

6.1%

ABF

4.8%

GB Food

1.7%

GB Market


1 Year Return

-3.8%

ABF

-3.3%

GB Food

2.9%

GB Market

Return vs Industry: ABF matched the UK Food industry which returned -3.3% over the past year.

Return vs Market: ABF underperformed the UK Market which returned 2.9% over the past year.


Shareholder returns

ABFIndustryMarket
7 Day6.1%4.8%1.7%
30 Day-3.5%-2.8%-0.7%
90 Day-4.7%-2.7%-1.8%
1 Year-1.9%-3.8%-0.8%-3.3%8.0%2.9%
3 Year-7.3%-11.6%-2.4%-9.6%18.2%3.8%
5 Year-12.5%-18.4%1.7%-8.4%35.6%6.1%

Price Volatility Vs. Market

How volatile is Associated British Foods's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Associated British Foods undervalued compared to its fair value and its price relative to the market?

1.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: ABF (£22.34) is trading below our estimate of fair value (£22.67)

Significantly Undervalued: ABF is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ABF is poor value based on its PE Ratio (19.3x) compared to the Food industry average (17x).

PE vs Market: ABF is poor value based on its PE Ratio (19.3x) compared to the UK market (16.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: ABF is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: ABF is overvalued based on its PB Ratio (1.9x) compared to the GB Food industry average (1.2x).


Next Steps

Future Growth

How is Associated British Foods forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

9.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ABF's forecast earnings growth (9.4% per year) is above the savings rate (1.2%).

Earnings vs Market: ABF's earnings (9.4% per year) are forecast to grow slower than the UK market (12.9% per year).

High Growth Earnings: ABF's earnings are forecast to grow, but not significantly.

Revenue vs Market: ABF's revenue (4% per year) is forecast to grow faster than the UK market (3.9% per year).

High Growth Revenue: ABF's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: ABF's Return on Equity is forecast to be low in 3 years time (11.2%).


Next Steps

Past Performance

How has Associated British Foods performed over the past 5 years?

12.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ABF's earnings have grown by 12.4% per year over the past 5 years.

Accelerating Growth: ABF's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ABF had negative earnings growth (-12.3%) over the past year, making it difficult to compare to the Food industry average (4.5%).


Return on Equity

High ROE: ABF's Return on Equity (10.1%) is considered low.


Return on Assets

ROA vs Industry: ABF has a higher Return on Assets than the Food industry average last year.


Return on Capital Employed

ROCE Improving: ABF has not improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Associated British Foods's financial position?


Financial Position Analysis

Short Term Liabilities: ABF's short term assets (£5.1B) exceeds its short term liabilities (£3.0B)

Long Term Liabilities: ABF's short term assets (5.1B) exceeds its long term liabilities (1.1B)


Debt to Equity History and Analysis

Debt Level: ABF's debt to equity ratio (8.4%) is considered satisfactory

Reducing Debt: ABF's debt to equity ratio has reduced from 17.6% to 8.4% over the past 5 years.

Debt Coverage: ABF's debt is well covered by operating cash flow (199.6%).

Interest Coverage: ABF's interest payments on its debt are well covered by EBIT (40.2x coverage).


Balance Sheet

Inventory Level: ABF has a high level of physical assets or inventory.

Debt Coverage by Assets: ABF's debt is covered by short term assets (assets are 6.566450x debt).


Next Steps

Dividend

What is Associated British Foods's current dividend yield, its reliability and sustainability?

2.03%

Current Dividend Yield


Dividend Yield vs Market

company2.0%marketbottom25%2.0%markettop25%5.4%industryaverage2.7%forecastin3Years2.4%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: ABF's dividend (2.03%) is higher than the bottom 25% of dividend payers in the UK market (1.99%).

High Dividend: ABF's dividend (2.03%) is low compared to the top 25% of dividend payers in the UK market (5.41%).

Stable Dividend: ABF's dividends per share have been stable in the past 10 years.

Growing Dividend: ABF's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (39.2%), ABF's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ABF's dividends in 3 years are forecast to be well covered by earnings (34.1% payout ratio).


Next Steps

Management

What is the CEO of Associated British Foods's salary, the management and board of directors tenure and is there insider trading?

14.1yrs

Average management tenure


CEO

George Weston (55yo)

14.5yrs

Tenure

UK£3,826,000

Compensation

Mr. George Garfield Weston has been the Chief Executive Officer of Associated British Foods plc since April 1, 2005. Mr. Weston has been the Chief Executive officer of Weston Foods Ltd., a holding Company  ...


CEO Compensation Analysis

Compensation vs. Market: George's total compensation ($USD4.92M) is about average for companies of similar size in the UK market ($USD4.63M).

Compensation vs Earnings: George's compensation has been consistent with company performance over the past year.


Management Age and Tenure

14.1yrs

Average Tenure

56.5yo

Average Age

Experienced Management: ABF's management team is seasoned and experienced (14.1 years average tenure).


Board Age and Tenure

3.5yrs

Average Tenure

62yo

Average Age

Experienced Board: ABF's board of directors are considered experienced (3.5 years average tenure).


Insider Trading

Insider Buying: ABF insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£49,65111 Sep 19
Linda Cairnie
EntityIndividual
Role
Lead Director
Senior Independent Director
Shares2,223
Max PriceUK£22.36
BuyUK£67,50001 Mar 19
Graham Allan
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares3,000
Max PriceUK£22.50

Ownership Breakdown


Management Team

  • John Bason (61yo)

    Finance Director & Executive Director

    • Tenure: 0yrs
    • Compensation: UK£2.71m
  • Paul Marchant

    Chief Executive Officer of Primark/Penneys

    • Tenure: 9.9yrs
  • George Weston (55yo)

    CEO & Executive Director

    • Tenure: 14.5yrs
    • Compensation: UK£3.83m
  • Paul Lister (55yo)

    Company Secretary

    • Tenure: 0yrs
  • Flic Howard-Allen (58yo)

    Head of External Affairs

    • Tenure: 0yrs
  • Des Pullen

    Group Human Resources Director

    • Tenure: 13.8yrs
  • Julie Withnall

    Group Head of Reward

    • Tenure: 0yrs

Board Members

  • John Bason (61yo)

    Finance Director & Executive Director

    • Tenure: 0yrs
    • Compensation: UK£2.71m
  • Michael George McLintock (57yo)

    Independent Chairman

    • Tenure: 1.5yrs
    • Compensation: UK£209.00k
  • George Weston (55yo)

    CEO & Executive Director

    • Tenure: 14.5yrs
    • Compensation: UK£3.83m
  • Wolfhart Hauser (70yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: UK£74.00k
  • Graham Allan (64yo)

    Independent Non-Executive Director

    • Tenure: 1.1yrs
    • Compensation: UK£2.00k
  • Arthur Ryan

    Chairman of Primark/Penneys

    • Tenure: 0yrs
  • Richard Reid (63yo)

    Independent Non-Executive Director

    • Tenure: 3.5yrs
    • Compensation: UK£95.00k
  • Linda Cairnie (65yo)

    Senior Independent Director

    • Tenure: 0.8yrs
    • Compensation: UK£83.00k
  • Emma Adamo (56yo)

    Non-Executive Director

    • Tenure: 7.8yrs
    • Compensation: UK£74.00k

Company Information

Associated British Foods plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Associated British Foods plc
  • Ticker: ABF
  • Exchange: LSE
  • Founded: 1935
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: UK£17.593b
  • Shares outstanding: 787.52m
  • Website: https://www.abf.co.uk

Number of Employees


Location

  • Associated British Foods plc
  • Weston Centre
  • 10 Grosvenor Street
  • London
  • Greater London
  • W1K 4QY
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ASBF.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1980
ABFLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1980
AFO1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1980
ABFLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1980
ASBF.YOTCPK (Pink Sheets LLC)ADR EACH CNV INTO 1 ORD GBP0.0568USUSDJun 1992
AFO2DB (Deutsche Boerse AG)ADR EACH CNV INTO 1 ORD GBP0.0568DEEURJun 1992

Biography

Associated British Foods plc operates as a diversified food, ingredients, and retail company worldwide. It operates through five segments: Grocery, Sugar, Agriculture, Ingredients, and Retail. The Grocery  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/17 20:38
End of Day Share Price2019/10/17 00:00
Earnings2019/03/02
Annual Earnings2018/09/15


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.