Key facts
- Primark's adjusted operating profit fell 14% to £471 million in the first half.
- Primark's sales rose 2% to £4.65 billion in the first half.
- New stores contributed 4% to Primark's growth.
- Like-for-like sales at Primark slipped 2.7% overall.
- In the UK, Primark achieved sales growth of 3% and like-for-like sales were up 1.3%.
- In continental Europe, Primark sales slipped 1% and like-for-like sales fell 5.6%.
Associated British Foods plc (ABF) has confirmed its decision to demerge its discount clothing retailer Primark from its food business, a move expected to be completed by the end of the calendar year. The separation aims to maximize long-term returns for shareholders by allowing each business to pursue its distinct growth opportunities.
Primark reported a 14% decrease in adjusted operating profit to £471 million for the first half, despite a 2% increase in sales to £4.65 billion. New store openings contributed 4% to this growth, with positive performance in the UK, where sales grew 3% and like-for-like sales increased by 1.3%, allowing Primark to gain market share in a declining market. However, continental Europe saw a 1% slip in sales and a 5.6% decline in like-for-like sales.
ABF stated that the demerger will enable greater understanding of its food business's differentiated portfolio and long-term growth prospects as a pure-play food producer. For Primark, the separation will facilitate appropriate governance to maximize its potential in existing and new markets. The company noted that while the cost consequences of the demerger in 2026 are expected to be manageable, there is a risk to Primark's sales if the conflict in the Middle East persists and consumer spending deteriorates. ABF's strong balance sheet is seen as underpinning the group's resilience.