Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Associated British Foods
There’s a pre-close trading update out from Primark owners Associated British Foods [LON:ABF] this morning ahead of its interims due towards the end of April. Sales growth is expected to be robust, with all divisions expected to show growth over the same period a year earlier, with the exception of sugar, which is expected to post comparable figures. The Primark brand continues to fire on all cylinders, both in the UK and overseas, whilst the company’s habit of building stock levels ahead of the Chinese New Year is expected to help mitigate at least some of the supply chain risks of the Coronavirus outbreak.
Distributions company Bunzl [LON:BNZL] has published full year results this morning, showing modest growth against a backdrop of growing macroeconomic uncertainty. The dominant North American market has been the biggest area of weakness although margins have remained unchanged here. The economic backdrop is set to continue presenting challenges, but the company sees its strong competitive position and diversified business as having the scope to keep improving growth. Full year dividends are set to be increased by 2.2%.
Newspaper publishers Reach [LON:RCH] – owners of titles including the Mirror and Express – have posted full year results today. Whilst on one hand they paint the familiar picture of falling revenues for the news industry, profitability has increased and this is something which should be applauded. It’s worth noting that the company is now the 5th largest digital asset in the country, with the four places above all being the preserve of US tech giants such as Facebook and Microsoft. With this in mind, the company’s fortunes arguably deserve more scrutiny going forward. Investors will be rewarded with a 6.7% increase in the dividend.
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