AB Foods expected to flag Primark split in review update Associated British Foods (ABF) is set to provide an update on its strategic review of the group’s structure on Tuesday, with expectations that it will outline plans to separate its Primark fashion chain from its food businesses. The review, aimed at maximising long-term shareholder value, has been conducted with input from ABF’s largest shareholder, Wittington Investments, which aims to retain a majority stake in both entities should a demerger proceed. The company announced the review alongside its annual results for the fiscal year ended 13 September 2025, during which group revenue fell to £19.45bn from £20bn, a 3% decline at actual exchange rates and 1% at constant currency. Adjusted operating profit declined 13% to £1.7bn, weighed down by weak performance in its sugar business. Despite this, Primark reported increased sales, with revenue rising 1% year on year to £9.5bn and adjusted operating profit up 2% to £1.1bn, driven by new store openings across Europe and the US. CEO George Weston highlighted that ABF’s food operation, including brands such as Twinings and Ovaltine, possesses a “highly attractive portfolio, deep global expertise and much potential,” though it has historically been less well understood by financial markets compared to Primark. Barclays analyst Warren Ackerman noted broad agreement in the City on the “pretty compelling” logic for a split, citing “highly different operating models and a lack of meaningful synergies” between the discount retailer and the food businesses. However, investor opinion remains divided. Some hedge funds have questioned the timing of the review announcement, particularly given weak consumer sentiment and the proximity to the UK budget, while long-term investors have expressed support for the strategic rationale. ABF shares fell more than 3% on Tuesday as markets focused on Primark’s like-for-likes and profitability concerns rather than the separation proposal. The review is being advised by Rothschild & Co, and ABF has stated that no decision has been made on a split. Chairman Michael McLintock emphasized that the board is assessing whether a separation would better position both businesses for future growth, given Primark’s scale and the necessitate for improved market understanding of the food division. Wittington Investments has confirmed its commitment to maintaining majority ownership in both entities should a demerger occur.
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