11th Jul 2005 07:00
Associated British Foods PLC11 July 2005 Associated British Foods plc ABF accelerates expansion of Primark with the acquisition of Littlewoods Associated British Foods plc ("ABF"), the international food, ingredients andretail group, has today announced the acquisition of Littlewoods Stores HoldingsLimited and St James Street Properties Limited (together "Littlewoods") from LWFinance Limited for a consideration of £409m, on a debt and cash free basis,subject to a working capital adjustment. The consideration will be paid in cashfrom existing resources at completion, which is expected at the end of July. At30 April 2005 Littlewoods had historic gross assets of £431m, an operatingprofit for the year of £18m and profit before tax was break even. The acquisition comprises 120 Littlewoods stores covering high street locationsacross the UK but excludes the homeshopping activities of Littlewoods. Thestores trade from a total of 2.1 million square feet and have a further 2.5million square feet of non-trading space. ABF intends to retain some 40% of the current retail selling space of the storeportfolio which it will convert to Primark. Those stores selected will bestsuit Primark in terms of location and size. It is confidently expected that theremaining stores will be sold to other high street retailers. Primark currently has 122 stores and over 2.4 million square feet of retailselling space. It already has a strong programme of new store openings andexpects to trade from 128 stores with 2.9 million square feet of selling spaceby February 2006. These further new stores will be opened progressively fromJune 2006 and will increase this selling space by nearly 30%. The total investment is expected to be some £375m after receipt of the netproceeds from stores sold to other retailers and the cost of the refurbishmentand fitting out for Primark. In the first full year of trading the operatingprofit return is expected to exceed the ABF cost of capital. In the half year to 5 March 2005 Primark reported a sales increase of 12% to£448m and an operating profit increase of 18% to £59m. The like-for-like salesincrease was 6% and Primark has continued to trade very strongly since thatdate. Littlewoods will continue to trade for the period until March 2006 with the fullbacking of ABF. The retail restructuring specialist, Hilco, has been retainedto manage these operations on behalf of ABF until then. George Weston, Chief Executive of Associated British Foods, said, "This is a unique opportunity to acquire a portfolio of large stores inattractive high street locations. It will bring Primark to many towns andcities where it is currently not present." For further information please contact: Associated British Foods Tel: +44 (0)20 7399 6500John Bason, Finance Director Citigate Dewe Rogerson Tel: +44 (0)20 7638 9571Jonathan Clare / Chris Barrie / Sara Batchelor A conference call for analysts will take place at 9.00am (BST) on +44 20 79475005, requesting Associated British Foods. Slides for the conference call will be available on the company website,www.abf.co.uk. The presentation will also be audible on a telephone replayfacility for 7 days following the event on +44 (0)20 7081 9440, account number422522 and ask for recording number 758456. Notes to Editors About Primark Primark is a major retail group employing over 10,000 people. Primark operates122 stores in the UK and in Ireland (where it trades under the Penneys name)with 2.4 million square feet of selling space. Primark offers fashionablequality merchandise at sensible prices. Primark already had a programme of new store openings which includes therecently announced acquisition of stores which had previously traded as Allders.Kingston and a larger store in Mullingar have successfully commenced tradingand a further six stores, in Leicester, Bromley, Hull, Leeds, Cardiff, Thurrockand Dundalk will open in time for Christmas. The Oxford store is scheduled toopen next year. Primark carries a full range of departments - Womenswear, Secret PossessionsLingerie Shop, Childrenswear, Menswear, Footwear, Accessories, Hosiery andHousehold Textiles. Brands include Primark(R) Theme(R) Cedarwood State(R) Rebel(R) Denim Company(R) Atmosphere(R) Prima(R) early days(R) Young Dimension(R) andSecret Possessions(R). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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