Being cheap is the chief selling point for Primark, Associated British Foods’ best-known brand. That attribute also should ignite investors’ interest in the stock. Shares in the group, which additionally owns Twinings tea and Ovaltine drinks, have struggled to regain ground since last March and are valued near their pandemic trough at only 12 times forecast earnings for next year.
A stretched balance sheet deserves to be punished, but a company sitting on too much cash also tries investors’ patience. ABF has long been a strong cash-generator. In September, its net cash stood at £1.9 billion. That excluded lease liabilities, although those were lower owing to rent concessions, signing short leases and a switch to monthly payment terms.
Now, though, there’s a better chance that
