LSE:ABF

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Flawless balance sheet and slightly overvalued.


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

Stable Share Price: ABF is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: ABF's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

4.5%

ABF

2.0%

GB Food

0.9%

GB Market


1 Year Return

-17.4%

ABF

-13.2%

GB Food

-9.1%

GB Market

Return vs Industry: ABF underperformed the UK Food industry which returned -15.5% over the past year.

Return vs Market: ABF underperformed the UK Market which returned -10.2% over the past year.


Shareholder returns

ABFIndustryMarket
7 Day4.5%2.0%0.9%
30 Day22.9%14.7%9.2%
90 Day4.0%2.6%6.6%
1 Year-16.2%-17.4%-11.6%-13.2%-5.5%-9.1%
3 Year-26.9%-30.4%-18.3%-23.3%1.4%-11.0%
5 Year-35.4%-40.0%-20.9%-28.7%26.5%-2.2%

Long-Term 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?

26.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ABF (£21.28) is trading below our estimate of fair value (£29.12)

Significantly Below Fair Value: ABF is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ABF is poor value based on its PE Ratio (36.9x) compared to the GB Food industry average (12x).

PE vs Market: ABF is poor value based on its PE Ratio (36.9x) compared to the UK market (20.4x).


Price to Earnings Growth Ratio

PEG Ratio: ABF is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: ABF is overvalued based on its PB Ratio (1.8x) compared to the GB Food industry average (1x).


Next Steps

Future Growth

How is Associated British Foods forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

24.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ABF's forecast earnings growth (24.2% per year) is above the savings rate (1.2%).

Earnings vs Market: ABF's earnings (24.2% per year) are forecast to grow slower than the UK market (26.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ABF's revenue (5.5% per year) is forecast to grow slower than the UK market (6.7% per year).

High Growth Revenue: ABF's revenue (5.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ABF's Return on Equity is forecast to be low in 3 years time (10.9%).


Next Steps

Past Performance

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

-0.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ABF has high quality earnings.

Growing Profit Margin: ABF's current net profit margins (3.3%) are lower than last year (5.6%).


Past Earnings Growth Analysis

Earnings Trend: ABF's earnings have declined by 0.7% 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 (-48.2%) over the past year, making it difficult to compare to the Food industry average (14.1%).


Return on Equity

High ROE: ABF's Return on Equity (4.9%) is considered low.


Next Steps

Financial Health

How is Associated British Foods's financial position?


Financial Position Analysis

Short Term Liabilities: ABF's short term assets (£5.8B) exceed its short term liabilities (£3.2B).

Long Term Liabilities: ABF's short term assets (£5.8B) exceed its long term liabilities (£4.1B).


Debt to Equity History and Analysis

Debt Level: ABF's debt to equity ratio (5%) is considered satisfactory.

Reducing Debt: ABF's debt to equity ratio has reduced from 13.6% to 5% over the past 5 years.

Debt Coverage: ABF's debt is well covered by operating cash flow (371.4%).

Interest Coverage: ABF's interest payments on its debt are well covered by EBIT (7.9x coverage).


Balance Sheet


Next Steps

Dividend

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

2.16%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ABF's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ABF's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ABF's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ABF's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: ABF is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ABF's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

15.6yrs

Average management tenure


CEO

George Weston (56 yo)

15.58yrs

Tenure

UK£1,138,000

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 ($USD1.52M) is below average for companies of similar size in the UK market ($USD4.55M).

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


Leadership Team

NamePositionTenureCompensationOwnership
George Weston
CEO & Executive Director 15.58yrsUK£1.14m0.46%
£ 73.6m
John Bason
Finance Director & Executive Directorno dataUK£749.00k0.023%
£ 3.7m
Sue Whalley
Chief People & Performance Officerno datano datano data
Flic Howard-Allen
Head of External Affairsno datano datano data
Julie Withnall
Group Head of Rewardno datano datano data
Paul Lister
Company Secretaryno datano datano data
Paul Marchant
Chief Executive Officer of Primark/Penneys11yrsno datano data

15.6yrs

Average Tenure

57.5yo

Average Age

Experienced Management: ABF's management team is seasoned and experienced (15.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
George Weston
CEO & Executive Director 15.58yrsUK£1.14m0.46%
£ 73.6m
John Bason
Finance Director & Executive Directorno dataUK£749.00k0.023%
£ 3.7m
Michael George McLintock
Independent Chairman2.58yrsUK£362.00k0.0030%
£ 484.8k
Wolfhart Hauser
Independent Non-Executive Director5.83yrsUK£65.00k0.00050%
£ 79.7k
Graham Allan
Independent Non-Executive Director2.17yrsUK£65.00k0.00076%
£ 121.2k
Richard Reid
Independent Non-Executive Director4.58yrsUK£102.00k0.00042%
£ 67.0k
Linda Cairnie
Senior Independent Director1.92yrsUK£102.00k0.00066%
£ 105.3k
Emma Adamo
Non-Executive Director8.92yrsUK£65.00k0.064%
£ 10.2m

4.6yrs

Average Tenure

63yo

Average Age

Experienced Board: ABF's board of directors are considered experienced (4.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

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£15.948b
  • Shares outstanding: 789.89m
  • 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 Analysis2020/11/24 20:38
End of Day Share Price2020/11/24 00:00
Earnings2020/09/12
Annual Earnings2020/09/12


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.