Shares in Primark owner suspended after closures announced
Shares in the owner of Primark were briefly suspended after the company announced the temporary closure of stores due to coronavirus.
Trading in Associated British Foods shares was suspended at 9am after they inexplicably fell by 100% to 0.01p, something analysts said could have been because a trader hit the wrong button on their computer.
Shares are usually suspended when there is a rush of trades in one company.
It came after news that the business had closed a fifth of its Primark stores, which make up a third of its sales.
The stores are in France, Spain, Italy and Austria and have been closed as governments in those countries have placed restrictions on non-essential stores to stop the spread of coronavirus among populations.
ABF said: “These stores currently generate 30% of Primark’s sales. From the date of this announcement, we had expected sales of £190m from these stores over the next four weeks.
“The remainder of the estate, including the UK which represents 41% of sales, has seen like-for-like sales decline over the last two weeks and these have accelerated over the past few days as a result of reduced footfall.
“We are managing the business appropriately but do not expect to significantly mitigate the effect of the contribution lost from these sales.”
On the bright side, however, the company said most of its suppliers in China had reopened factories there as the virus situation has improved.
The virus originated in China late last year and the country has had the majority of infections and deaths since then.
ABF said that, due to the effect of COVID-19 on Primark’s sales, it could not give earnings guidance for the rest of the financial year but an update would be given on 21 April.
The company added that it has “a strong balance sheet, substantial cash liquidity with some £800m of net cash at the half year and significant undrawn bank facilities”.
Shares in ABF were trading again shortly after 10am and were down by 13% by 11.30am.
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