Associated British Foods reported 1% sales growth and plans to open 15 new Primark stores. The closure of the bioethanol plant and merger with Hovis bread caused shares to drop 10%. Primark’s sales growth is weak due to low consumer demand in Europe. The acquisition of Hovis aims to boost the struggling Allied Bakeries.

The closure of Vivergo’s ethanol and animal feed operations was due to weak prices and lack of government support. The UK bread market is competitive, with pricing heavily influenced by supermarkets. Morningstar maintains a fair value estimate of GBX 2,450 per share for Associated British Foods, viewing the shares as undervalued despite market reactions.

Primark’s US expansion and elimination of duty-free exemptions for Chinese imports could benefit the company. Sugar business recovery is delayed to next year due to oversupply in Europe, but ABF remains a major global sugar producer. The profit recovery is expected to be supported by strong operations in Africa.

Read more at Morningstar: Weak Primark Growth and Vivergo Plant Closure