Associated British Foods might separate its Primark trend outlets from its meals companies, it stated on Tuesday, because it reported a 13 % drop in full-year revenue pushed by a weak efficiency in its sugar unit.
“The board of ABF has been conducting a review of the group structure with a view to maximising long-term value,” it stated.
“Although no decision has been taken, the outcome of this review may lead to the board deciding to undertake a separation of the Primark and Food businesses.”
The group stated the overview was being performed in session with its largest shareholder, Wittington Investments, which remained dedicated to sustaining majority possession of each companies.
A Positive Surprise, Analysts Say
Primark accounted for 65 % of the group’s working revenue within the 12 months to September 13, which, based mostly on the group’s present market capitalisation of 16.34 billion kilos ($21.93 billion), would point out a price for Primark of round 10.6 billion kilos.
The firm stated Rothschild & Co had been helping the board with the overview.
Analysts at Barclays stated a potential Primark pure play was a “positive surprise”.
“Primark is now of a size that it makes sense, and foods is undervalued within ABF,” they stated in a be aware.
Shares in ABF had been buying and selling 1.7 % decrease at 2,244 pence at 0834 GMT in risky buying and selling.
In addition to Primark, which trades from 475 shops in 18 international locations, the group owns grocery manufacturers akin to Ovaltine, Ryvita and Twinings, in addition to main sugar, agriculture and substances companies.
Profit Rose at Primark Last Year, Fell in Grocery Ops
AB Foods has stated for many years that whereas it retains its conglomerate construction beneath fixed overview, it believed it labored effectively.
“We keep the structure under review because we have to, but the combination of the two, food and Primark, has worked really well for a long, long time,” CEO George Weston advised Reuters in April.
The group made adjusted working revenue, its most popular revenue measure, of 1.734 billion kilos ($2.33 billion) within the 12 months to September 13, on group income down 3 % at 19.46 billion kilos.
While adjusted working revenue elevated 2 % at Primark, it fell 6 % in grocery, whereas sugar was solely breakeven, damage by low European costs.
“In 2026, we expect the group to deliver growth in adjusted operating profit and adjusted EPS, and we are confident in the group’s medium and long-term growth prospects,” AB Foods stated.
However, it cautioned it anticipated the buyer surroundings to stay subdued.
Prior to Tuesday’s replace shares in AB Foods had risen 11.6 % in 2025.
By James Davey
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