AB Foods Considers Primark Spin-Off Amid 13% Profit Decline

Associated British Foods (ABF), owner of Primark, is considering splitting the group into two separate businesses, separating the rapidly growing Primark retail chain from its food division. This review follows a 13% drop in ABF's overall profits and a slight revenue decline to £19.5 billion, despite a 1% sales increase at Primark, which posted a 2% rise in adjusted operating profit. Primark's growth is attributed to new store openings across Europe and the US, along with digital and product initiatives, although like-for-like sales showed weakness, especially in the UK and Ireland. Meanwhile, ABF's food business, which includes brands like Twinings and Kingsmill, experienced a 6% decline in profits, impacted notably by a 10% drop in sugar sales. The strategic review, conducted with input from the largest shareholder Wittington Investments, aims to unlock value by better reflecting the scale and potential of both businesses, with no final decision yet made. ABF remains committed to maintaining majority ownership in both divisions as it seeks to maximize long-term growth and shareholder returns.