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Associated british foods chat - a safe share

Discussion in 'General Share Chat' started by http://www.londonstockexc, Jul 9, 2015.

  1. Inspiration

    Inspiration Moderator Moderator

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    This is one of those safe, steady shares. Dividends are fairly low (1% to 2% in recent years) but it holds up well in recessionary times, as they manufacture most of the ingredients and groceries that we consume in the major supermarkets. British Sugar, under the Silver Spoon brand, makes sugar from UK produced sugar beet, so isn't subject to Forex differences. I've listed the main brands below, most of which are household names. Tesco's has been fairly ruthless with them and they have often had to sell some products as loss leaders in order to gain shelf space for others. Primark is their biggest success and is one of the largest clothing retailers in Europe.

    Hubby used to work in finance in Head Office for many years. He has a lot of respect for George Weston, CEO, who followed many of his father's business ideas, however, some of the other directors have been happy to undertake tax avoidance schemes, which were the subject of protests a few years ago.

    Under Gary Weston, the share price remained fairly low. He was adamant that he would not be dictated to by the City, who said that the share price would only increase if he spent some of the £1.6bn cash that the company was sitting on. He only bought companies if he saw value and as the 3rd richest person in Britain at the time, felt no need to be rushed! The significant increase in share price came afterwards, when he had to resign from the Board through ill health. Other directors, who had been with the firm for many years also left at a similar time. The new directors were able to use the cash to invest in new subsidiaries.

    Website showing divisions and brands:
    http://www.abf.co.uk/about_us/our_group/our_businesses

    Brief wikipedia history:
    http://en.m.wikipedia.org/wiki/Associated_British_Foods

    At 25th April, the share price was 2772p. It is worth considering as a safe, core share and is especially good in recessionary times. (Year high 3293p, low 2407p)
     
    Last edited: Apr 25, 2015
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