Related British Foods (GB:ABF) announced changes to its finance department last week as inflation continues to rise. The company has hired Eoin Tonge as its new chief financial officer. Mr Tonge joined the business from rival retailer Marks and Spencer (GB:MAKSY), where he had worked as CFO for the past 2 years.
He will succeed John Bason, who served as ABF’s chief financial officer for nearly 20 years. Mr. Bason will remain with the company until April 2023 to facilitate the transition process.
Further along in his career, Mr. Bason will lead the newly formed Strategic Advisory Board as Chairman and act as a senior advisor to Primark.
Better strategies in place with new advisory board
The new board is designed to help senior Primark executives continue their work on expanding the business in the United States, to places such as Philadelphia and New York. At present, Primark is mainly concentrated in the UK and mainland Europe.
Mr Bason said: “It is my responsibility to really bring together people with expertise in each of these areas and then channel them so that the appropriate level of support is given to Primark’s management team.
The board will also work to establish a better online marketplace for Primark stores. Primark store revenue was hit hard during the pandemic as the company had no online presence.
Additionally, as part of its digital transformation, it launched its website on a trial basis in the UK market. The website presents many products and their availability in stock by store.
According to TipRanks analysts’ rating consensus, Associated British Foods stock has a Hold rating. The stock is rated by 13 analysts, of which eight are Hold, four Buy and one is a Sell recommendation.
The average price target is 2,020p, with upside potential of 19.1%. Analyst price targets range from a low of 1,670p to a high of 2,500p.
Barclays’ Warren Ackerman recently reiterated his buy rating on the stock. Its target price is 2,300p, which is 36% higher than the current price.
Further expansion into overseas markets as well as the development of its online marketplace will help drive Primark’s revenue growth.
With the new management changes, the company will also be able to mitigate the impact of inflation and control rising costs. Primark is on track to deliver an adjusted operating margin of around 10% in fiscal year 2022.