Nov 04, 2025 (MarketLine via COMTEX) --
Associated British Foods (ABF) is reviewing its group structure with a view to aEURoemaximising long term value", a process that could lead to the separation of its clothing retailing subsidiary Primark from its food businesses.
This comes as the companyaEUR(TM)s operating profit dropped 23% year-over-year to AGBP1.48bn ($1.94bn) in fiscal 2025 (FY25).
No decision has been taken by ABF regarding the restructuring and the review is being carried out in consultation with its largest shareholder, Wittington Investments, the company said in its FY25 annual results announcement.
Wittington Investments remains committed to majority ownership of both the Primark and food businesses.
ABF chief executive George Weston said: aEURoeI fully support the boardaEUR(TM)s review of the group structure and will be closely involved in the process and any outcome. Within ABF we have two great businesses, but one strong culture of long-term value creation driven by the dedication and excellence of our people.
aEURoeOur 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.AI am very excited by what we can deliver in the future for both Food and Primark."
Clive Black, analyst at Shore Capital, called the move "a big surprise"
"The ABF stock trades on reasonably undemanding c.12 times (x) PER, a c.7x EV/EBITDA and offers a c3% dividend yield; it may go better on a split up. On balance, whilst recognising the recent bumps in the road, we still believe ABF can drive more from its divisions, maybe especially so as two businesses, and so Group's earnings going forward albeit FY26 is a little sideways, and we continue to see positive potential in this equity, especially if a period of sequential delivery can emerge."
ABFaEUR(TM) overall performance in FY25
During the 52 weeks ended 13 September 2025, the companyaEUR(TM)s revenue fell 1% as growth in retail was offset by a decline in sugar.
Retail sales rose 1% to AGBP9.5bn over the year, supported by the rollout of stores in Europe and the US that contributed about 4% to sales growth.
ABFaEUR(TM)s profit before tax for the year reached AGBP1.41bn, a 26% drop from AGBP1.92bn in the prior fiscal. Its adjusted operating profit declined by 13% to AGBP1.73bn.
George Weston stated: "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.aEURA
Outlook of ABF for fiscal 2026
Looking ahead, ABF expects the group to deliver growth in adjusted operating profit and adjusted earnings per share in 2026 and said it remains confident in medium- and long-term prospects.
For Primark, the company said it expects consumer demand to remain subdued and will focus on strengthening the customer value proposition through product, price, and digital engagement to drive like-for-like sales.
Primark is said to have made progress on UK like-for-like sales in the second half and plans to roll out similar initiatives in other markets.
The store rollout programme will continue in Europe, the US and through a franchise model. This initiative is expected to contribute around 4% to sales growth in 2026.
ABF said it continues to target "white space" expansion equivalent to around 4aEUR"5% per annum contribution to total sales for the foreseeable future.
The group expects Primark's adjusted operating profit margin for 2026 to be slightly below last yearaEUR(TM)s underlying margin as it prioritises investment in growth and noted a non-recurring benefit of about AGBP20m in 2025.
aEURoeLooking ahead, we are confident in the Group outlook for 2026 although much depends on the consumer environment, which is particularly unpredictable at the moment. Our strong balance sheet underpins disciplined investment as we continue building brands and businesses that will deliver growth over the long term,aEUR Weston added.
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COMTEX_470023610/2227/2025-11-04T09:45:45
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