Primark owner posts coronavirus warning, shares fall

Associated British Foods (LON:ABF), the owner of Primark, warned on Monday of the consequences the outbreak of the deadly coronavirus will have on its business.

Shares in the company were down on Monday afternoon.

Associated British Foods said that each of its businesses are “closely monitoring” the current situation.

A number of its food businesses have operations in China, and Primark sources a broad range of its products from the country.

Associated British Foods said that, though its AB Mauri, AB Agri and Ovaltine factories are still operating, they are doing so at reduced capacity as a result of labour issues.

Meanwhile, Primark usually builds inventories ahead of Chinese New Year; it is “well stocked” to cover a few months and therefore no short-term impact is expected.

However, Associated British Foods added that Primark may face supply shortages on some lines as the year progresses, if delays to factory production are prolonged.

“Following the outbreak of COVID-19 in China, our main priority is the health and safety of our colleagues and we are taking all possible actions to support them,” Associated British Foods said in a statement.

“At the same time, each of our businesses are closely monitoring the current and potential effects on their operations of the outbreak. The effect on supply chains for businesses dependent on Chinese sourcing continues to evolve,” the company continued.

Fears rise as the deadly virus continues to spread across the world.

Last week, the Financial Reporting Council told companies that they must outline the risks to their business caused by the outbreak of the virus.

Associated British Foods joins a list of companies who have issued similar warnings, including Puma (ETR:PUM), Adidas (ETR:ADS),  Apple (NASDAQ:AAPL) and Aveva Group (LON:AVV).

Shares in Associated British Foods plc (LON:ABF) were down on Monday, trading at -1.55% as of 14:27 GMT.