The owner of Primark and food brands Kingsmill and Twinings has not explained to investors well enough of the growth potential and value of its portfolio of food businesses, according to its CEO.
Associated British Foods (ABF) is one of the UK’s biggest owners of grocery brands, with over half of its annual £20bn of sales coming from these food businesses.
Despite this, its chief executive George Weston told Reuters that its investors are paying more attention to fashion giant Primark.
He wants to put a greater focus on communicating the importance of these food businesses, which include Silver Spoon, Ryvita and Blue Dragon.
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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.”
He explained that it’s understandable for investors to have a great focus on Primark.
“If you’ve been trying to value ABF as a stock since Covid started, so much of it has been about Primark’s prospects, from being shut down to not having online capability to supply chains to inflation.”
However, Weston added now there is better certainty around the future of Primark, it will allow investors to take a closer look at the group’s food brands, which have seen profits surge 39% over the past year.
It comes as the group wants to grow its portfolio of food businesses in the FMCG sector with more small to medium sized acquisitions in the United States, Australia and in speciality ingredients.
