Associated British Foods said it is considering splitting its Primark fashion chain from its Food operations as part of a strategic review designed “with a view to maximising long-term value”.

The London-listed conglomerate, valued at about £16 billion, said no decision has been taken. The review is being conducted with adviser Rothschild & Co and in consultation with its largest shareholder, the Weston family’s Wittington Investments, which holds 59 per cent and “remained committed to maintaining majority ownership of both businesses,” according to company statements and reports.

George Weston, the group’s chief executive officer, said he “fully” supports the process and will be “closely involved” in the review and any outcome. He added: “Our 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.”

Analysts at Barclays called the possibility of a Primark pure play a “positive surprise”, noting “Primark is now of a size that it makes sense, and foods is undervalued within ABF.”

The announcement accompanied full-year results showing pressure in the Sugar division and softer group performance. For the 12 months to 13 September, pretax profit fell to £1.41 billion, down 26 per cent from £1.92 billion a year earlier, while group revenue declined 3 per cent to £19.46 billion. Adjusted operating profit was £1.734 billion and the company proposed a final dividend of 42.3 pence per share, taking the total to 63.0 pence.

Retail sales at Primark edged up 0.4 per cent to £9.49 billion, with adjusted operating margin of 11.9 per cent and adjusted operating profit up 1.8 per cent to £1.13 billion. Like-for-like sales declined 2.3 per cent for the year, including a 2.0 per cent drop in the second half, as AB Foods cited “cautious consumer sentiment and the lack of a seasonal purchasing catalyst during mild autumn weather” last year.

In the UK and Ireland, sales declined 1 per cent and like-for-like sales fell 3.1 per cent, with the company highlighting “particularly weak shopping activity within elements of Primark’s customer base” facing higher energy and food bills.

Grocery sales fell 2.6 per cent to £4.13 billion and Ingredients sales declined 4.2 per cent to £2.04 billion, though Ingredients’ adjusted operating profit rose 10 per cent. Sugar sales slumped 12 per cent to £2.05 billion, with the division moving from a £213 million profit to a small adjusted operating loss, impacted by lower prices and the closure of the Vivergo bioethanol plant.

AB Foods said that, while the consumer environment is expected to “remain subdued”, it anticipates delivering growth in adjusted operating profit and adjusted earnings per share in 2026, and expects improved profitability in Sugar.

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