Associated British Foods Considering Separating Primark from Food Operations
Associated British Foods (ABF) is currently undergoing a strategic review aimed at maximizing long-term value, which may result in the separation of its Primark retail arm from its food operations. The company has not yet made a final decision, but the review could lead to a potential split of the Primark and food businesses.
Wittington Investments, ABF’s largest shareholder, is providing input for the review and aims to retain a majority stake in both businesses. Michael McLintock, chairman of Associated British Foods, stated that the board is conducting an in-depth review to assess whether a separation of Primark and food businesses would be a better structure for the company in the future.
Rothschild & Co is advising the board on the process of potentially separating the two businesses. The strategic review comes as AB Foods reported lower revenue and profits for the fiscal year ending on 13 September 2025.
Group revenue declined to £19.45bn ($25.42bn) from £20bn, with a 3% decrease at actual exchange rates and a 1% decrease at constant currency. Company revenue also decreased by 1%, with growth in retail offset by a decline in sugar.
Adjusted operating profit fell by 13% to £1.73bn and adjusted profit before tax dropped by 13% to £1.69bn. On a statutory basis, operating profit was down 23% to £1.48bn, and profit before tax fell 26% to £1.41bn.
Retail sales saw a 1% increase to £9.5bn, supported by store openings in Europe and the US contributing to sales growth. UK like-for-like sales improved in the second half, while Europe delivered a strong first half but weaker trading later in the year.
Adjusted operating profit in retail increased by 2% to £1.1bn, with an adjusted operating margin of 11.9%. In the grocery sector, international brands recorded good sales growth, offset by US oils and Allied Bakeries, while Ingredients posted strong growth in adjusted operating profit.
ABF CEO George Weston expressed his support for the board’s review of the group structure and emphasized the potential of the company’s food business. He highlighted the exceptional portfolio, deep global expertise, and growth potential of the food business, which has historically been less understood by financial markets compared to Primark.
The potential separation of Primark from its food operations represents a significant strategic move for Associated British Foods, as the company seeks to drive long-term value and optimize the performance of both businesses.
This article was originally published on Retail Insight Network.
