Associated British Foods explores business separation amid profit decline
Key takeaways
- Associated British Foods is exploring spinning off its food business and fashion retailer Primark, but wants to maintain majority ownership in both.
 - The company reported a 13% decline in full-year profit, with its grocery business falling 6%, sugar business breaking even, and Primark’s operating profit growing 2%.
 - The UK-listed group operates across multiple sectors, including food ingredients, sugar, and agriculture, and this year acquired the 135-year-old Hovis brand.
 
Associated British Foods (ABF) revealed today that it is considering spinning off its food business, as well as its fashion retailer Primark, as part of a strategic review of its business structure.
The UK-listed group, which said it wants to maintain a majority ownership in both businesses, also reported a decline in full-year profit (-13%) to £19.5 billion (US$ 25.5 billion). Operating profit also fell 23% to £1.5 billion (US$2 billion).
Its grocery business dropped (-6%) while the sugar business broke even. Primark’s operating profit, however, grew by 2%.
ABF could give each separate business a sharper strategic focus by dividing its food and fashion retail operations, which target different consumer markets. Investors may value a fast-growing apparel business disconnected from a slower-growth sugar business, for instance.
Reports suggest that a potential spin-off of the businesses, in which ABK maintains majority ownership, could reassure existing shareholders concerned about a full demerger or sale.
ABF describes itself as a “diversified international food, ingredients and retail group,” operating in 56 countries, with customers in more than 100 countries and around 138,000 employees.
The company’s share price has increased by more than 70% over the last five years, compared with approximately +35% for the FTSE 100.

ABF’s food business
The company’s food business produces and sells food ingredients under four segments: Grocery, Sugar, Ingredients, and Agriculture.
The Grocery segment encompasses branded and private-label consumer food products, including well-known brands Ryvita (crispbread), Twinings (tea), and Kingsmill (bread).
In August, the company also acquired the 135-year-old Hovis brand for an undisclosed fee.
ABF has sugar operations in the UK, Spain, and Africa, producing white and brown sugar and sugar-derived co-products.
The Ingredients segment supplies other food manufacturers and industrial users with yeast, bakery ingredients, specialty lipids, emulsifiers, and enzymes.
ABF’s internal review remains ongoing.












