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AB Foods Needs To Highlight Merit Of Food Business, CEO Says

By Reuters
AB Foods Needs To Highlight Merit Of Food Business, CEO Says

Primark owner Associated British Foods (AB Foods) has not done a good enough job explaining the benefits of its food business to investors, the chief executive has said.

George Weston, CEO since 2005, said investors should be told of the strategic logic, growth potential and value of AB Foods’ food business.

As well as owning the fashion chain, the company owns grocery brands such as Twinings and Ovaltine hot drinks and Blue Dragon cooking products.

It also runs major sugar, ingredients and agricultural businesses, operating in 55 countries with 133,000 employees.

‘A Lot More Method To It’

Weston told Reuters journalists that going forward he would place a greater emphasis on communicating the importance of the food business as investors lacked a good understanding of the portfolio.


He plans to say more this year, and to make more acquisitions.

Weston said, “It’s seen as being a rag-tag collection of unrelated food businesses. It’s not.

“There’s a lot more method to it than I think parts of the outside world would understand.

“We have to start explaining it with a bit more purpose.”

Weston added that with AB Foods predominantly covered by retail analysts, the focus on the retail business made sense.


He said, “If you’ve been trying to value ABF as stock since Covid started (in 2020), so much of it has been about Primark’s prospects, from being shut down to not having online capability to supply chains to inflation.

“The big delta (risk measure) in people’s valuation model is what you thought about Primark.”

‘The Stars Aligned’

Weston said he hoped a return to relative stability in supply chains and inflation as well as more confidence in Primark’s future meant investors would look more closely at the food business.

The company’s half-year results showed that all aspects were performing well.

“The stars aligned in this first half better than the ever have before,” he said, highlighting profit growth of 39% in grocery.


AB Foods’ shares are up 12% so far this year.

Read More: Primark Owner Raises Profit Outlook After Strong First Half

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