AB Foods considers separating Penneys division
AB Foods reports 13% profit drop as sugar struggles; board reviews separating Primark from food operations
Print5 November 2025
Associated British Foods (AB Foods) is weighing a potential split between its Penneys/Primark retail arm and its food businesses, following a 13% fall in full-year profits.
The decline was largely driven by weak performance in its sugar operations.
Primark, trading from 475 stores across 18 countries (as Penneys in Ireland), currently contributes around 65% of AB Foods’ operating profit, highlighting the retailer’s central role in the group’s overall performance.
Grocery and beverage brands
AB Foods also owns grocery and beverage brands including Ovaltine, Ryvita, and Twinings, alongside major sugar, agriculture, and ingredient operations.
The board, assisted by Rothschild & Co, is conducting a strategic review of the group’s structure to maximise long-term value.
While no decision has yet been made, separation of the Primark and food divisions is under active consideration.
AB Foods CEO George Weston noted the review aims to conclude by April 2026, ahead of the group’s first-half results.
Wittington Investments, the Weston family-controlled shareholder with 58.8% equity, remains committed to retaining majority ownership in both businesses.
Analysts have welcomed the possibility of a Primark-focused strategy, describing it as a “positive surprise” and noting that the food segment may be undervalued within the conglomerate.
For the year ending September 13, group revenue fell 3% to £19.46 billion (€22 billion), while adjusted operating profit stood at £1.734 billion (€1.968 billion).
Profit rose 2% at Primark but fell 6% in grocery, with the sugar unit breaking even amid low European prices.
Looking ahead, AB Foods expects growth in adjusted operating profit and EPS in 2026, while cautioning that the consumer environment may remain subdued.
Read more: AB Foods reports 10% profit fall
© 2025, ShelfLife by Ryan Brennan
Followers 0
Fans 0
Followers