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Primark's owner has hinted at a potential split of the retail chain from its food business, following a dip in annual profits. Associated British Foods (AB Foods) unveiled a review of the group's structure alongside its full-year financial results. The firm reported an adjusted pre-tax profit of £1.7 billion for the year to 13 September, marking a 13% drop compared with the previous year. Despite this, Primark saw a 1% year-on-year sales growth to £9.5 billion, with stronger trading in the latter half of the year offsetting a weaker first half. The company noted "particularly weak shopping activity within elements of Primark's customer base" as consumers were more cautious with their spending, resulting in a 3.1% slip in UK and Ireland sales compared to last year. However, spending picked up in the second half of the year, which AB Foods attributed to a stronger product range, particularly in womenswear, and increased digital engagement – having recently launched a mobile app in some markets. But overall retail sales growth was counterbalanced by a 10% drop in sales within its sugar business. AB Foods also runs a grocery business, encompassing brands such as Kingsmill, Blue Dragon, Jordans, Twinings and Ryvita, as well as an ingredients division. Sales remained largely unchanged year-on-year for both divisions. The firm informed investors that no final choice had been reached, but its assessment could lead to the board opting to split Primark from the food operations. Chief executive George Weston said: "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." Nevertheless, the business stated it was anticipating Primark's consumer climate to stay "subdued" in the coming year. Yet it was planning to concentrate on its pricing to boost sales whilst continuing to expand with new outlets.
