Associated British Foods is reviewing a potential separation of its Primark fashion chain and its food businesses, the company said on Tuesday, as it reported a fall in annual profit.
The board is conducting an in-depth review to assess whether a split would be a better structure, although no decision has been made.
"Given the scale that Primark has now attained and the need for better understanding of our Food businesses, the Board has been undertaking an in-depth review of the future shape of ABF to assess whether a separation of the Primark and Food businesses would be a better structure in the years ahead," Chairman Michael McLintock said.
The review is being conducted in consultation with its largest shareholder, Wittington Investments, which the company said remains committed to maintaining majority ownership of both businesses.
The announcement came as the conglomerate reported group revenue fell 3% to 19.5 billion British Pounds for the year ended Sept. 13.
Adjusted operating profit declined 13% to 1.7 billion British Pounds, which the company attributed to a significant reduction in profitability in its sugar business.
Sales at Primark grew 1% to 9.5 billion British Pounds, helped by new store openings in Europe and the U.S., while the sugar division posted a small adjusted operating loss.
The company said it expects to deliver growth in adjusted operating profit in the next financial year and announced a new share buyback program of 250 million British Pounds.
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