Associated British Foods plc

Group revenue was GBP 9.5 billion, flat versus last year at actual rates and down 2% at constant currency, helped by a GBP 76 million foreign exchange translation benefit. Group adjusted operating profit was GBP 691 million, down 18% at constant currency, and adjusted EPS was down 15%. Primark sales grew 2% to GBP 4.7 billion, with like-for-like sales down 2.7%; U.K. sales rose 3% with like-for-like growth of 1.3%, while Continental Europe sales fell 1% and like-for-like sales fell 5.6%. Primark’s adjusted operating profit margin was 10.1%, and Group free cash flow was GBP 71 million versus GBP 27 million last year. Net debt including lease liabilities was GBP 3 billion, leverage was 1.2x, and liquidity was GBP 2.2 billion. For the full year, management said Primark’s adjusted operating margin is expected to be approximately 10%, Grocery adjusted operating profit is expected to be moderately below last year, and Sugar is now expected to deliver an adjusted operating loss for the full year; overall group adjusted operating profit and adjusted EPS are still expected to be below last year. CapEx is still expected to be around GBP 1.2 billion for 2026, and the company expects to complete GBP 250 million of buybacks this financial year, with GBP 187 million already done.

George Weston framed the Primark demerger as a long-planned governance change, stressing that the business and the food group are very different and deserve separate boards and shareholder bases. He was upbeat on Primark’s long-term growth levers—price leadership, product, digital, supply chain, and franchise expansion—and said the U.K. work showed the business can reenergize sales. On food, he emphasized resilience, cash generation, and the ability to improve second-half profit, while acknowledging Sugar as the main problem area and noting the Middle East conflict could pressure consumer demand and costs.

Joana Edwards led with the hard numbers: group revenue of GBP 9.5 billion, adjusted operating profit of GBP 691 million, and free cash flow of GBP 71 million. She said Primark’s margin was 10.1%, lowered by markdowns and a step-up in investment, but partially offset by foreign exchange and supplier efficiencies; she also noted the balance sheet remains strong with net debt of GBP 3 billion, leverage of 1.2x, and liquidity of GBP 2.2 billion including GBP 1.8 billion of committed facilities. Capital allocation remained disciplined, with GBP 534 million of CapEx in H1, around GBP 100 million per year going into technology, an interim dividend of 20.7p in line with last year, and GBP 250 million of buybacks planned for the year. She also said the group tax rate was 24.5% and expected to remain broadly in line with 2025.

The first analyst question asked whether the Primark demerger changes long-term growth or capital allocation, whether Primark’s margin compression reflected buying mistakes, and whether ABF would run more portfolio reviews in Foods. Management’s initial response was cut off in the transcript, so no complete answer is available. In the prepared remarks, however, management did say the Primark split is about giving each business dedicated oversight and accountability, not financial engineering, and that the food portfolio is still being actively developed rather than put up for review.