Associated British Foods could separate its Primark fashion shops from its food businesses, it said on Tuesday, as it reported a 13 percent drop in full-year profit driven by a weak performance in its sugar unit.

“The board of ABF has been conducting a review of the group structure with a view to maximising long-term value,” it said.

“Although no decision has been taken, the outcome of this review may lead to the board deciding to undertake a separation of the Primark and Food businesses.”

The group said the review was being conducted in consultation with its largest shareholder, Wittington Investments, which remained committed to maintaining majority ownership of both businesses.

A Positive Surprise, Analysts Say

Primark accounted for 65 percent of the group’s operating profit in the year to September 13, which, based on the group’s current market capitalisation of 16.34 billion pounds ($21.93 billion), would indicate a value for Primark of around 10.6 billion pounds.

The company said Rothschild & Co had been assisting the board with the review.

Analysts at Barclays said a possible Primark pure play was a “positive surprise”.

“Primark is now of a size that it makes sense, and foods is undervalued within ABF,” they said in a note.

Shares in ABF were trading 1.7 percent lower at 2,244 pence at 0834 GMT in volatile trading.

In addition to Primark, which trades from 475 stores in 18 countries, the group owns grocery brands such as Ovaltine, Ryvita and Twinings, as well as major sugar, agriculture and ingredients businesses.

Profit Rose at Primark Last Year, Fell in Grocery Ops

AB Foods has said for decades that while it keeps its conglomerate structure under constant review, it believed it worked well.

“We keep the structure under review because we have to, but the combination of the two, food and Primark, has worked really well for a long, long time,” CEO George Weston told Reuters in April.

The group made adjusted operating profit, its preferred profit measure, of 1.734 billion pounds ($2.33 billion) in the year to September 13, on group revenue down 3 percent at 19.46 billion pounds.

While adjusted operating profit increased 2 percent at Primark, it fell 6 percent in grocery, while sugar was only breakeven, hurt by low European prices.

“In 2026, we expect the group to deliver growth in adjusted operating profit and adjusted EPS, and we are confident in the group’s medium and long-term growth prospects,” AB Foods said.

However, it cautioned it expected the consumer environment to remain subdued.

Prior to Tuesday’s update shares in AB Foods had risen 11.6 percent in 2025.

By James Davey

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