PLC, which owns the fast-fashion Primark chain, is reshuffling its finance organization as it faces high costs of raw materials and energy.
The London-based retail and food processing conglomerate said on Thursday that Eoin Tonge would become its new director of finance. Mr. Tong, who currently serves as Chief Financial and Strategy Officer at the retail chain
plc will join no later than February next year, ABF said.
Mr Tong will succeed John Besson, who has served as ABF’s director of finance since 1999. Mr Besson will become chairman of a new strategic advisory board and senior advisor to the Primark business, the company said.
Mr Tonge has been CFO at Marks & Spencer since June 2020 and Chief Strategy Officer since May. He is on a six-month notice period, Marks & Spencer said, with a search process underway for his successor.
Eoin Tong, Chief Financial and Strategy Officer, Marks & Spencer Group. He will take over as director of finance at Associated British Foods next year.
photo:
Marks & Spencer Group Plc
ABF’s new advisory board is intended to provide outside expertise to Primark executives as they work to expand the chain’s stores in the US, particularly in East Coast markets such as Philadelphia and New York, and its digital operations, Mr Besson said on Thursday. As of May, Primark had 403 stores, most of them in the UK and Continental Europe.
“It is my responsibility to really bring together and then channel people with expertise in these areas so that the appropriate level of support is given to the Primark executive team,” Mr. Besson said. “Primark is a huge international business in a market that is rapidly changing and we believe all of this offers a great opportunity.”
In addition to its retail business, the company also operates sugar and bread factories, sells animal feed and owns subsidiaries such as George Weston Foods in Australia.
Mr Besson said he had been thinking about succession planning for his role since late last year, prompting a search for a successor.
“It’s passing on the baton in a predictable way,” he said. He plans to stay on as director of finance until the end of April 2023 to help with the transition.
Last month, ABF reported revenue of £4.05 billion for its third fiscal quarter ended May 28, equivalent to $4.84 billion, up 32% from the prior-year period, driven by higher raw materials and Driven by price increases in response to energy costs.
ABF said Premark’s revenue grew 81% compared to the prior-year period, to £1.73 billion. A filing shows that retail represented 43% of ABF’s revenue for the quarter, up from about 31% a year ago.
The company also said that Primark is on track to deliver an adjusted operating profit margin of 10% for the full year, up from 7.4% in 2021.
“We expect Primark to build on its gains overall very strongly as the economy really comes out of COVID,” Mr. Besson said.
Richard Chamberlain, managing director of RBC Capital Markets LLC, an investment bank, said ABF’s upcoming director of finance will focus on issues such as developing Primark’s e-commerce offering and looking at ways to increase future cash returns. The company has been slow to develop such an offering, which hurt when the pandemic hit. Last month, ABF said it would begin testing a click-and-collect service in 25 Primark stores, with an initial offering of children’s clothing and products later this year.
Change in Finance Director is a smart move as ABF is now well on its own recovery from drugs This happened during the coronavirus pandemic, which resulted in the closure of stores in Primark, according to note from analysts at Shore Capital Group Ltd., an investment firm.
“Tong joins ABF in a high quality business with a distinctive shareholder structure, excellent values, a top-notch assortment of different businesses, and a very strong balance sheet,” the analysts wrote.
—Sabella Ojia and Nina Trentman contributed to this article.
write to Mark Maurer Mark.Maurer@wsj.com
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