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Associated British Foods PLC on Tuesday said it is considering separating its Primark retail business and its Food operations as part of a review into the group’s structure. The London-based food processing firm and clothing retailer said no decision has been taken, and the review is being conducted in consultation with ABF’s largest shareholder, Wittington Investments, which remains committed to maintaining majority ownership of both businesses. Alongside fast fashion chain Primark, AB Foods owns food brands such as Twinings tea, Kingsmill bakery, Jordans cereals and Mazola cooking oils. AB Foods said Rothschild & Co has been assisting with the review, which is being led by Chair Michael McLintock. Chief Executive George Weston said he ‘fully’ supports the review and will be ‘closely involved’ in the process and any outcome. ‘Our unique and exceptional Food business has historically been less well understood by the financial markets than Primark, yet it has a highly attractive portfolio, deep global expertise and much potential. Primark has an incredibly strong international brand, a powerful customer proposition, and substantial growth opportunities,’ he commented. Shares in AB Foods were down 2.8% at 2,217.00 pence each in London on Tuesday morning. The news came as AB Foods reported pretax profit of £1.41 billion for the 12 months to September 13, down 26% from £1.92 billion a year prior. Adjusted pretax profit declined 12% to £1.70 billion from £1.96 billion. Revenue fell to £19.46 billion from £20.07 billion, while operating costs before exceptional items decreased to £17.88 billion from £18.24 billion. Revenue was below £19.7 billion consensus but adjusted pretax profit beat £1.67 billion expectations. AB Foods said growth in Retail revenue was offset by a decline in Sugar, while adjusted operating profit fell 12% due to a hit in Sugar. Retail sales grew 0.4% to £9.49 billion from £9.45 billion with an adjusted operating margin of 11.9%, up from 11.7%. Adjusted operating profit at Retail edged up 1.8% to £1.13 billion from £1.11 billion. AB Foods said Primark like-for-like sales declined 2.3% in the year, including a 2.0% drop in the second half of the financial year. In the UK and Ireland, sales declined 1% and like-for-like sales declined 3.1%, reflecting a decline in the UK clothing retail market and ‘particularly weak shopping activity within elements of Primark’s customer base.’ In Grocery, sales fell 2.6% to £4.13 billion from £4.24 billion, with adjusted operating profit of £478 million, down 6.5% from £511 million a year ago. Sales in Ingredients fell 4.2% to £2.04 billion from £2.13 billion, but adjusted operating profit of £257 million rose 10% from £233 million a year ago. In Sugar, sales slumped 12% to £2.05 billion from £2.33 billion, with an adjusted operating loss of £2 million compared to a £213 million profit a year ago. Sales in Agriculture fell 1.8% to £1.62 billion from £1.65 billion with adjusted operating profit of £25 million, down 39% from £41 million a year ago. The firm proposed a final dividend of 42.3 pence per share, giving a total dividend of 63.0p per share. In the previous financial year, AB Foods paid a full year dividend of 63.0p per share, along with a special dividend of 27.0p. In financial 2026, the company expects to deliver growth in adjusted operating profit and adjusted earnings per share. Adjusted earnings per share fell 11% to 174.9p in financial 2025 from 196.9p, while adjusted operating profit was down 13% at £1.73 billion from £2.00 billion. In Primark, ABF expects the consumer environment to ‘remain subdued’, while it expects international brands in the Grocery arm to deliver ‘good growth in sales and profit’. It expects to improve profitability in Sugar and deliver a small adjusted operating profit for the division in 2026. ‘This was a year of intense strategic and operational activity within ABF. Most of our businesses delivered robust financial results, while navigating a challenging external backdrop,’ said CEO Weston. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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