Highlights

• Associated British Foods posted adjusted operating profit of £1,508m, down 14%, on Revenue of £19,582m for 2026.

• Primark lifted sales 2% to £9.8bn, but its adjusted operating profit fell 12% to roughly £1.0bn.

• The board held the total Dividend at 63.0p, including a final payment of 42.3p due in January 2027.

• The group expects 2027 adjusted operating profit and EPS below 2026, with Sugar losing £70m to £170m.

Primark's tills kept ringing, but the profit line told a tougher story. Associated British Foods (LSE:ABF) opened its books for the 52 weeks to 12 September 2026 on Tuesday morning, revealing a 14% drop in adjusted operating profit to £1,508m as a loss-making Sugar arm and a thinner Primark Margin bit into earnings. The FTSE 100 group kept its dividend intact, pressed on with plans to split Primark from its food businesses, and warned that next year's profit will come in lower still. For anyone tracking UK shares with exposure to both the high street and the grocery aisle, the update packs plenty to digest.

What Associated British Foods announced

Group revenue came in at £19,582m. Adjusted profit before tax fell 14% to £1,457m, while adjusted Earnings per share dropped 11% to 156.0p, a smaller decline than profit thanks to share buybacks. Basic Earnings Per Share were 131.9p.

Cash generation slowed. Free Cash Flow was £652m and gross Investment reached £1,433m. Return on average Capital employed eased to 12.7% from 15.5%. The group ended the year with net cash before Lease liabilities of £305m and total net debt, including leases, of £2,845m. It completed £253m of Buybacks during the year.

George Weston, chief executive, said: "Our results this year reflect a challenging operating environment and macroeconomic headwinds."

Primark grows sales but margin narrows

Primark remains the engine room. Sales rose 2% to £9.8bn, yet adjusted operating profit fell 12% to about £1.0bn and the Operating Margin slipped to 10.2%. The squeeze came from higher investment in pricing, Marketing and digital. Like-for-like sales edged up 0.5% in the UK but fell 4.7% across Europe, underlining the uneven picture for the discount fashion chain.

Sugar, Grocery and Ingredients under pressure

The food side of the house had a harder year. Sugar swung to an adjusted operating loss of £47m, mainly because of lower average selling prices in Europe. Grocery's adjusted operating profit fell 11%, primarily due to lower profit from US oils, while Ingredients dropped 8% as Demand for US bakery ingredients stayed soft.

Dividend held as the demerger advances

Shareholders will receive a final dividend of 42.3p, keeping the total for the year at 63.0p. The shares go ex-dividend on 10 December 2026, with a Record Date of 11 December and payment on 8 January 2027, subject to approval at the Annual General Meeting on 4 December. The deadline for Dividend reinvestment elections is 23 December.

On the break-up, the company said "work on the demerger is progressing well" and it remains on track to separate Primark from the food Business in December 2027. That timetable keeps the separation of Primark firmly on the agenda for London Stock Exchange watchers.

Outlook and what investors may watch next

Guidance points lower for the year ahead. The company said: "In 2027, the Group is expected to deliver adjusted operating profit and adjusted EPS below 2026, mainly due to Sugar." It expects Sugar to post an adjusted operating loss of between £70m and £170m, a wide range that reflects continued weakness in European pricing.

Key risks centre on European sugar prices, consumer demand in Primark's continental markets and the execution of a complex demerger. Investors are likely to watch Primark's like-for-like trends in Europe, any narrowing of the Sugar loss range and further detail on the separation as December 2027 approaches.

The bigger picture for the FTSE 100 group

Associated British Foods enters its final full year as a combined retail and food conglomerate with a softer profit base, a maintained payout and a clear separation date. Primark is still growing its top line, while the food businesses contend with deepening losses in Sugar. How those two stories unfold will shape the company's path to its planned split.