The Board of ABF has been conducting a review of the group structure and although it stressed that no decision has been taken, it said the outcome of this review may lead to it deciding to undertake a separation of the Primark and food businesses.
This review is being conducted in consultation with ABF’s largest shareholder, Wittington Investments, which remains committed to maintaining majority ownership of both businesses, it said.
ABF’s food business includes brands such as Twinings, Patak’s and Kingsmill as well as ingredients and agriculture.
The news comes as the group said it expects its international food business in 2026, to deliver good growth in sales, underpinned by investment in marketing and product innovation, albeit offset by lower volumes and profit in its US oils business.
It also expects to deliver sales growth in its yeast and bakery ingredients business and in the specialty ingredients portfolio.
However, it admitted much would depend on the consumer environment, which is particularly unpredictable.
George Weston, Chief Executive of Associated British Foods, said that the food business “has historically been less well understood” by the financial markets than Primark.
“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,” he said.
“I fully support the Board’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.”
Michael McLintock, Chairman of ABF, said: “As a Board, we have regularly looked at the structure of the Group to assess how best to develop our strong Food and Primark businesses. ABF has delivered good long-term returns for shareholders in its current structure and been a supportive home for both Primark and our Food businesses.”
He added: “Given the scale that Primark has now attained and the need for better understanding of our Food businesses, the Board has been undertaking an in-depth review of the future shape of ABF to assess whether a separation of the Primark and Food businesses would be a better structure in the years ahead.”
Earlier this year ABF which owns Kingsmill reached an agreement to acquire rival bread brand Hovis.
In September, the Competition and Markets Authority announced that it was gathering information about the proposed acquisition.
