3 November 2026
If you are covering the latest results from Associated British Foods, please see the following comment from Chris Beckett, consumer staples analyst at Quilter Cheviot:
“Associated British Foods’ shares opened lower this morning following a set of results that offered few reasons to get excited. Much of the bad news had already been flagged in September, but today’s update serves as a reminder of the pressure points across the business.
“Primark remains a good business, but it is facing margin pressure and a difficult consumer backdrop. Meanwhile, the lack of profitability in sugar is far more noticeable this year, and the outlook for grocery has been knocked by elevated input prices. ABF’s overall guidance is largely unchanged, with profits still expected to fall in the new financial year compared to the last, leaving relatively little to tempt investors.
“The more interesting development is the clearer timetable for the Primark demerger, now pencilled in for December next year. The split makes strategic sense, but the uncomfortable truth is that the real opportunity to spin off Primark at a premium valuation was the best part of two decades ago. Primark is still a strong retailer, but today it is a more mature business facing margin pressure, so it is difficult to see the demerger unlocking a significant amount of value on its own.
“What remains of ABF will also be a somewhat unusual collection of businesses, spanning sugar, ingredients and agriculture alongside consumer brands. Splitting Primark out is the right thing to do, but a cleaner structure does not automatically mean a more valuable one.”
