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(Bloomberg) -- More cheap parcels exported from China are flowing into the UK than rival European economies, undermining British retailers that want the government to accelerate a promised crackdown.

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Chinese export data shows $1.8 billion of cheap parcels entered the UK between December and April, the sixth-most globally and more than France and Germany combined. Though the total was 11% lower than a year earlier amid a global slowdown, the drop was far smaller than in France where the government implemented a tax on the parcels in March.

Large British retailers including Primark and Marks & Spencer Group Plc are pushing for the UK government to take steps this year to close a tax loophole they say is helping online giants such as Shein and Temu gain market share.

In her budget statement in November, Chancellor of the Exchequer Rachel Reeves issued her promise to do so by 2029, but retailers say that is not soon enough. Meanwhile the government has yet to publish responses to a public consultation on the plan that closed on March 6.

The delay “only supports those operating overseas with no UK footprint and disadvantages UK retailers who employ thousands,” said George Weston, Chief Executive Officer at Primark owner Associated British Foods Plc. “Other countries are acting decisively to support their domestic sectors and the government must do the same.”

Scrapping the exemption is “a significant reform which backs our businesses to compete and grow,” a UK Treasury spokesperson said. “We are removing the customs duty relief for low-value imports and reforming the way these goods are declared into the UK to ensure all goods are appropriately controlled.”

Shein is engaging with the government on the UK’s proposed reforms, the company said in a statement. “Advocating for measures that risk increasing costs for British shoppers in the name of competitiveness will not ultimately benefit British consumers or retailers,” it said.

Temu didn’t respond to multiple requests for comment.

Crackdown

French President Emmanuel Macron’s government imposed a €2 ($2.30) tax on low-value imports in March, after introducing advertising restrictions on fast-fashion brands earlier in the year. The European Union is set to introduce a €3 fixed customs duty on parcels valued under €150 from next month, ahead of more extensive measures in 2028. President Donald Trump scrapped so-called de minimis exemptions in the US last year.

Story Continues

“I would really ask the government to go faster on the de minimis exemption abolishment,” said Tjeerd Jegen, CEO at discount retailer B&M European Value Retail Plc. The 2029 deadline is “way too late.”

Globally, Chinese low-value parcel exports fell 11% in the period from a year earlier, matching the drop in the UK. That’s happening as Chinese firms shift strategy in response to changes to de minimis rules around the world, according to Jun Du, a professor of economics at Aston Business School. Larger platforms are increasingly consolidating goods into bulk shipments, she said.

Even so, eighteen British retailers and associations including M&S and Next Plc wrote to the government last month, urging ministers to bring forward the crackdown. The companies noted that a flat fee of £2.60 ($3.47) per parcel would raise £1.7 billion a year for the UK treasury.

Low-value imports to the UK tripled between 2021 and 2024, while more marketing is being targeted at UK customers, the retailers wrote.

Tax Revenue

“This isn’t just important for British retail,” said Alex Baldock, outgoing CEO at electronics retailer Currys Plc. “Closing the loophole would generate significant tax receipts for the Treasury at a time when the government is looking for every pound of revenue it can find.” He added that Currys isn’t directly affected by the import of low-value parcels.

“Waiting until 2029 risks allowing billions more pounds of imports to enter under a regime that creates a structural disadvantage for UK retailers and reduces potential tax revenues,” said Dan Finley, CEO of clothing retailer Debenhams Group.

In France, anti-fraud authorities have fined Shein, including for not providing consumers with mandatory information. Junior minister for small business Serge Papin said on social media he’s fighting against “unfair competition.”

Shein, founded in China and now based in Singapore, also locked horns with the French government last year when ministers attempted to suspend its online platform in the country over sales of childlike sex dolls and weapons.

The company said it is contesting the fines in full. “We take our legal and regulatory obligations in France very seriously and remain fully committed to transparency and compliance with French regulations,” Shein said.

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Pharmacy and beauty chain Boots is in talks with an Australian rival and the billionaire Weston family over a potential £7.5 billion sale.

Australian pharmacy group Sigma Healthcare confirmed on Wednesday that it has held “preliminary discussions” over a takeover.

The company stressed to shareholders that there is “no certainty” any transaction will take place.

It followed a report by the Financial Times that the UK-based pharmacy and beauty chain could opt for a 10 billion US dollar (£7.5 billion) sale over a potential stock market listing.Boots was bought by Sycamore Partners last year (David Parry/PA)·David Parry

It said Boots had also held talks with the Canadian branch of the billionaire Weston family, which owns the majority of grocery chain Loblaws.

The Weston family’s British side is the majority owner of Primark through its parent firm Associated British Foods, which also owns grocery brands including Twinings and Ryvita.

It is understood that talks with both potential suitors are at an early stage.

The potential sale comes only a year after Boots was snapped up by private equity firm Sycamore Partners after the US investment giant acquired parent firm Walgreens Boots Alliance for 23.7 billion US dollars (£17.7 billion).

In August last year, Sycamore split off Boots from the US operations.

The new UK-based Boots business included Boots UK and Ireland, Boots opticians, No7 Beauty company and pharmacies in Thailand, Mexico and Germany.

It is understood that Sycamore is still considering a potential initial public offering (IPO) for Boots on the London stock market.

However, a private sale would deal a fresh blow to the London Stock Exchange amid a dearth of new major listings in recent years.

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Associated British Foods ist wieder im Fokus, da die fair value-Schätzungen in einem aktualisierten Modell von £19,54 auf £18,73 reduziert wurden. Die Street-Broker haben die Preisziele um 160 GBp und 110 GBp gesenkt und ein großer Broker hat sich zu einer Downgrade-Notierung geäußert. Diese Preiszielanpassungen sind eng mit den frischen Analystenmeinungen über Umsatzwachstum, Margen und das P/E, das Investoren bereit sein könnten, zu bezahlen, verbunden, was eine Anpassung der Erwartungen anstatt ein einzelnes Außenseitergericht bedeutet. Lesen Sie weiter, um zu sehen, wie sich diese sich entwickelnde Geschichte auf die Art und Weise auswirken könnte, wie Sie den Akt von hier aus verfolgen.

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The United Kingdom's stock market has recently faced challenges, with the FTSE 100 index experiencing declines due to weak trade data from China and falling commodity prices affecting major companies. Amid these market fluctuations, dividend stocks can offer a measure of stability and income for investors seeking consistent returns. In this article, we will explore three UK dividend stocks, including B.P. Marsh & Partners, that may provide attractive opportunities in the current economic climate.

Top 10 Dividend Stocks In The United Kingdom

Name Dividend Yield Dividend Rating RS Group (LSE:RS1) 3.75% ★★★★★☆ Multitude (LSE:0R4W) 8.70% ★★★★★☆ MONY Group (LSE:MONY) 7.24% ★★★★★★ Keller Group (LSE:KLR) 3.17% ★★★★★☆ James Halstead (AIM:JHD) 6.42% ★★★★★☆ Impax Asset Management Group (AIM:IPX) 12.10% ★★★★★☆ IG Group Holdings (LSE:IGG) 3.13% ★★★★★☆ Halyk Bank of Kazakhstan (LSE:HSBK) 12.46% ★★★★★☆ Dunelm Group (LSE:DNLM) 9.13% ★★★★★☆ 4imprint Group (LSE:FOUR) 4.72% ★★★★★☆

Click here to see the full list of 46 stocks from our Top UK Dividend Stocks screener.

Here we highlight a subset of our preferred stocks from the screener.

B.P. Marsh & Partners

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: B.P. Marsh & Partners PLC invests in early-stage and SME financial services intermediary businesses in the United Kingdom and internationally, with a market cap of £241.61 million.

Operations: B.P. Marsh & Partners PLC generates revenue of £118.87 million from consultancy services and trading investments in financial services.

Dividend Yield: 6.6%

B.P. Marsh & Partners offers a mixed dividend profile. Despite a low payout ratio of 4.9%, indicating dividends are covered by earnings, the absence of free cash flows raises sustainability concerns as dividends aren't covered by cash flows. Dividend payments have been volatile and unreliable over the past decade, though they have increased overall. Recently, BPM announced a special £2 million dividend for FY 2028 and is actively repurchasing shares, potentially enhancing shareholder value.

Click here and access our complete dividend analysis report to understand the dynamics of B.P. Marsh & Partners. Upon reviewing our latest valuation report, B.P. Marsh & Partners' share price might be too pessimistic.AIM:BPM Dividend History as at Apr 2026

Bioventix

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Bioventix PLC develops, produces, and distributes sheep monoclonal antibodies for global diagnostic use, with a market cap of £86.21 million.

Operations: Bioventix PLC generates revenue from its biotechnology segment, amounting to £12.54 million.

Story Continues

Dividend Yield: 9.1%

Bioventix's dividend yield is among the UK's top 25% at 9.09%, but sustainability is a concern with dividends not covered by earnings or cash flows, reflected in its high payout ratios. Despite this, dividends have been stable and growing over the past decade. Recent earnings showed a slight decline in sales and net income compared to last year, while the interim dividend remained unchanged at 70 pence per share.

Click here to discover the nuances of Bioventix with our detailed analytical dividend report. Our valuation report here indicates Bioventix may be undervalued.AIM:BVXP Dividend History as at Apr 2026

Associated British Foods

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Associated British Foods plc operates globally in the food, ingredients, and retail sectors with a market cap of £12.94 billion.

Operations: Associated British Foods plc generates revenue from several segments, including £2.06 billion from Sugar, £9.67 billion from Retail, £4.13 billion from Grocery, £1.56 billion from Agriculture, and £2.19 billion from Ingredients.

Dividend Yield: 3.4%

Associated British Foods' dividend yield of 3.42% is below the UK's top quartile, but its dividends are well covered by earnings and cash flows, with payout ratios of 47.3% and 41.7%, respectively. Despite a volatile dividend history over the past decade, an interim dividend of 20.7 pence per share was declared, reflecting confidence in future prospects amidst recent declines in sales and net income for H1 2026 to £9.47 billion and £445 million, respectively.

Dive into the specifics of Associated British Foods here with our thorough dividend report. In light of our recent valuation report, it seems possible that Associated British Foods is trading behind its estimated value.LSE:ABF Dividend History as at Apr 2026

Turning Ideas Into Actions

Dive into all 46 of the Top UK Dividend Stocks we have identified here. Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up. Enhance your investing ability with the Simply Wall St app and enjoy free access to essential market intelligence spanning every continent.

Curious About Other Options?

Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include AIM:BPM AIM:BVXP and LSE:ABF.

This article was originally published by Simply Wall St.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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Associated British Foods plc (LON:ABF) last week reported its latest interim results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results were roughly in line with estimates, with revenues of UK£9.5b and statutory earnings per share of UK£1.42. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.LSE:ABF Earnings and Revenue Growth April 25th 2026

Following last week's earnings report, Associated British Foods' 18 analysts are forecasting 2026 revenues to be UK£19.5b, approximately in line with the last 12 months. Per-share earnings are expected to climb 12% to UK£1.51. In the lead-up to this report, the analysts had been modelling revenues of UK£19.6b and earnings per share (EPS) of UK£1.56 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

See our latest analysis for Associated British Foods

The consensus price target held steady at UK£18.80, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Associated British Foods at UK£22.00 per share, while the most bearish prices it at UK£16.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Associated British Foods' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 0.8% growth on an annualised basis. This is compared to a historical growth rate of 7.9% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Associated British Foods is also expected to grow slower than other industry participants.

Story Continues

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Associated British Foods' revenue is expected to perform worse than the wider industry. The consensus price target held steady at UK£18.80, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Associated British Foods. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Associated British Foods analysts - going out to 2028, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Associated British Foods that we have uncovered.

Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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This article first appeared on GuruFocus.

Group Revenue: GBP9.5 billion, flat compared to last year at actual rates. Group Adjusted Operating Profit: GBP691 million, a decrease of 18% at constant currency. Adjusted EPS: Down 15%. Primark Sales: GBP4.7 billion, sales grew 2%. Primark Like-for-Like Sales: Declined by 2.7% overall. Primark Adjusted Operating Profit Margin: 10.1%. Grocery Sales: GBP2.1 billion, in line with H1 2025. Grocery Adjusted Operating Profit: Decreased 20% at constant currency. Sugar Sales: Declined 9% with an adjusted operating loss of GBP27 million. Agriculture Adjusted Operating Profit: GBP6 million compared to GBP12 million last year. Free Cash Flow: GBP71 million compared to GBP27 million last year. Capital Expenditure: GBP534 million in the first half. Net Debt Position: GBP3 billion compared to GBP2.1 billion in H1 2025. Total Liquidity: GBP2.2 billion. Interim Dividend: 20.7p, in line with last year. Share Buybacks: GBP187 million completed year-to-date, with GBP250 million expected for the full year.

Warning! GuruFocus has detected 6 Warning Signs with BOM:511742. Is ASBFF fairly valued? Test your thesis with our free DCF calculator.

Release Date: April 21, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Associated British Foods PLC (ASBFF) is proceeding with the demerger of Primark, which is expected to provide more focused governance and oversight for both the food and retail businesses. Primark has shown strong brand strength and market share gains in the UK, with successful initiatives to reenergize its customer proposition. The company has a solid balance sheet and continues to invest in growth opportunities, including GBP534 million of capital expenditure in the first half. The food business is positioned for strong improvement in profit in the second half, with investments in marketing, innovation, technology, and capacity. Primark's expansion into new markets, including the US and the Middle East through a new franchise model, is progressing well and contributing to sales growth.

Negative Points

Group adjusted operating profit decreased by 18% at constant currency, with significant margin compression in the first half. The sugar segment experienced an adjusted operating loss due to prolonged low average selling prices in Europe and reduced export sales. Primark's like-for-like sales declined overall by 2.7%, with weak trading in Europe and challenges in consumer spending. The grocery segment faced lower profit due to weakness in US oils and higher cocoa costs impacting international brands. The Middle East conflict poses potential risks to consumer spending and cost impacts, which could affect future performance.

Story Continues

Q & A Highlights

Q: How does the demerger of Primark affect your approach to long-term growth and capital allocation? A: George Weston, Chief Executive, stated that the demerger is expected to accelerate long-term growth by bringing in specific governance and expertise. Eoin Tonge, Acting Chief Executive of Primark, added that while the culture of long-term focus remains, the governance and focus will be more tailored to each business.

Q: Can you explain the margin compression in H1 and your expectations for future stability? A: Eoin Tonge acknowledged that they bought too much inventory, leading to higher markdowns. They are now more cautious with buying decisions and do not expect the same level of markdowns to repeat.

Q: Are there plans for further portfolio reviews in the Foods business? A: George Weston mentioned ongoing portfolio work, including divestments and acquisitions, to ensure the food business aligns with growth opportunities and cash generation.

Q: What impact do digital and marketing initiatives have on Primark's margins? A: Joana Edwards, Group CFO, stated that investments in digital and marketing are aimed at driving top-line growth rather than managing margins. The guidance remains consistent with previous expectations.

Q: What is the timeline for implementing improvements in the European Primark business? A: Eoin Tonge indicated that while digital improvements will take more time, other initiatives are expected to impact from spring/summer and more significantly into autumn/winter.

Q: How has the recent slowdown in Primark sales affected your outlook? A: Eoin Tonge described the slowdown as marked but not dramatic, and Joana Edwards noted that the guidance already accounts for a negative like-for-like sales assumption, reflecting a degree of conservatism.

Q: Can you provide more details on the free cash flow generation dynamics post-demerger? A: George Weston explained that both Primark and the food business are expected to be cash generative, with Primark historically being cash positive and food benefiting from reduced CapEx and sugar cash flows.

Q: How do you plan to address the challenges faced by Mazola in the grocery segment? A: George Weston highlighted efforts to maintain market share through heart-healthy campaigns and targeting a broader consumer base, despite reduced consumption in the Hispanic market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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Primark Is Getting Its Own Stock. Here's What That Means for the Brand - Moby

THE GIST

Associated British Food’s decision to de-merge Primark is less a bolt from the blue than an admission that the old structure had stopped making sense.

Primark, a clothing retailer with stores around the globe, has become large enough, visible enough, and strategically distinct enough to stand on its own, while the food arm wants to be understood as something more coherent than the stuff left behind after shoppers head for the clothing aisle.

WHAT HAPPENED

ABF said it will separate Primark from its food businesses, with completion targeted by the end of 2027. Once the demerger is done, existing ABF shareholders will own shares in both listed companies.

Management framed the move as a way to maximize long-term shareholder returns and give each business governance, strategy, and investor communication better suited to its own market. The food arm will keep the Associated British Foods name, while Primark will become a standalone listed retailer.

The company laid out the logic in familiar corporate language but the broad message was simple. Primark is now too big and too different to keep living inside a food conglomerate. The retailer generates about half the group’s revenue, operates hundreds of stores across multiple markets, and faces a completely different set of challenges from the rest of ABF’s portfolio.

The announcement came alongside underwhelming half-year results. Group profit fell, sales slipped, and several food divisions remained under pressure. Primark itself produced a mixed picture. U.K. like-for-like sales edged higher, but Europe was weaker, suggesting the retailer still has work to do even before it gets handed the keys to its own front door.

That tension matters. This is not a spin-off from a position of roaring strength. It is a structural reset arriving just as both halves of the business are dealing with awkward questions. Primark is facing tougher competition, weaker consumer confidence in parts of Europe, and the familiar problem of how to stay cheap, relevant, and fashionable without getting digitally outgunned by online rivals. The food side, meanwhile, has to prove it is more than a bag of unrelated assets stapled together by history.

WHY IT MATTERS

The obvious reason this matters is valuation. Investors tend to dislike conglomerates when the pieces inside them are hard to compare, hard to value, or pulling in different directions. ABF has had that problem in spades. Primark is a consumer retail story. FoodCo is a global staples and ingredients story. One sells T-shirts and socks to bargain hunters. The other worries about commodity cycles, brand portfolios, supply chains, and agricultural inputs. Trying to wrap both into one neat equity story has become increasingly awkward.

Story Continues

So the de-merger is, in part, a plea for clarity.

Primark gets to pitch itself as a global value-fashion retailer with room to expand internationally, invest in digital tools, and refine its customer proposition without being judged next to sugar margins or oils demand. That should make life easier for management and, in theory, for investors who want a direct bet on the brand.

FoodCo gets the opposite opportunity. For years, it sat behind the Primark spotlight like the quiet sibling at a loud family dinner. Now it can argue that it is a serious FTSE 100 food business with scale, cash generation, and a portfolio built to capture long-term demand across the food chain. Whether investors buy that story is another matter, but at least they will be able to see it properly.

Still, let’s not pretend every demerger is magical financial alchemy. Splitting a company in two does not automatically create growth, desirability, or multiple expansion. Sometimes it just gives you two businesses with the same problems, only now they have separate letterheads.

Primark, for all its strengths, is not entering some golden standalone age without baggage. It remains a low-margin retailer in a brutally competitive market. The brand is powerful, yes, but the value-fashion space is a knife fight. Shein and Temu have trained consumers to expect endless novelty and frictionless convenience, while Primark still leans heavily on large physical stores and the treasure-hunt appeal of rummaging around in person. That model can work brilliantly, but it is not immune to shifts in shopping habits or macro pressure.

The food business has its own headache. Once Primark is gone, investors will be left with a collection of businesses that may be solid but do not obviously scream strategic unity. Sugar, ingredients, grocery, and agriculture can make for resilient earnings in the right environment, but they can also look like a corporate leftovers buffet if management cannot articulate the thread connecting them.

There is also the timing. ABF is making this move during a period of geopolitical volatility, uneven consumer demand, and sticky cost pressures. That can be read two ways. Either the company is being smart by separating two businesses exposed to very different risks, or it is choosing to perform a delicate surgical procedure in the middle of a storm.

WHAT’S NEXT

Now comes the hard part, which is proving the split is more than an elegant presentation deck. Investors will want detail on capital structures, management incentives, governance, and how much real strategic freedom each side actually gains.

For Primark, the key question is whether independence leads to faster decisions and a more aggressive push on growth, especially internationally and digitally. For FoodCo, the challenge is narrative and discipline. Can it look like a focused food company rather than a respectable but slightly random cupboard of brands and industrial assets

ABF has decided the bundle is worth more in pieces. The market will spend the next 18 months deciding whether that is a revelation or just tidier packaging.

Downstream Analysis

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Positive Impacts

Companies

Associated British Foods (ABF.L) — The demerger is intended to unlock value for existing shareholders by allowing for clearer valuation and strategic focus for both the food and retail businesses. Primark (New Listing) — As a standalone entity, Primark will gain strategic freedom to pursue growth, invest in digital tools, and expand internationally without being constrained by the food conglomerate's priorities. PDD Holdings (PDD) — As the parent company of Temu, it benefits from the continued competitive pressure in the value-fashion market, which Primark acknowledges as a significant challenge. H&M (HNNMY) — As a competitor in the value-fashion segment, H&M may benefit from Primark's challenges in adapting to digital competition and shifts in shopping habits.

Industries

Investment Banking / Advisory — Firms involved in facilitating the demerger process will benefit from fees associated with the transaction. Shareholder Services — Companies providing services for managing two separate listed entities will see increased demand.

Neutral Impacts

Companies

Associated British Foods (ABF.L) — While the demerger aims for positive outcomes, the food business (post-Primark) still needs to prove its strategic unity and faces ongoing challenges like commodity cycles and articulating its value proposition to investors. Primark (New Listing) — Independence offers opportunities but also exposes Primark to the full force of a low-margin, brutally competitive value-fashion market, requiring significant investment in digital and international expansion. Inditex (ITX.MC) — As a major global fashion retailer, Inditex operates in a similar market to Primark but with a different model, making the demerger's direct impact on its operations mixed or minor. Tate & Lyle (TATE.L) — As a peer in the food ingredients sector, Tate & Lyle will observe the new 'FoodCo' as a more focused competitor, but the demerger itself does not fundamentally alter its market position.

Industries

Food Manufacturing — The demerger clarifies the competitive landscape by creating a focused food entity, but the industry still faces existing challenges related to commodity cycles, supply chains, and consumer demand. Clothing Retail — The value-fashion segment will see a newly independent, focused competitor in Primark, potentially intensifying competition but also offering clearer market segmentation for investors.

Countries / Commodities

UK — The demerger of a major UK-based conglomerate will lead to changes in its corporate structure and investor base, but the direct economic impact on the broader UK economy is likely to be mixed or minor. Europe — Primark's mixed sales performance in Europe suggests ongoing challenges, and the demerger itself does not immediately resolve broader consumer confidence issues or competitive pressures in the region.

Negative Impacts

Key Downstream Effects

[Long-term] Shareholder Value Unlocking — The demerger is expected to unlock value for existing ABF shareholders by allowing both the food business and Primark to be valued as pure-play entities, potentially leading to higher aggregate market capitalization as investors can better understand and invest in each segment. Confidence: High. [Medium-term] Increased Competition in Value-Fashion Retail — An independent Primark, freed from its conglomerate structure, is likely to pursue more aggressive growth strategies, particularly in digital and international expansion, intensifying competition for online rivals like Shein and Temu, and traditional players like H&M. Confidence: Medium. [Short-term] Investor Scrutiny on FoodCo's Strategy — Post-demerger, the remaining Associated British Foods (FoodCo) will face immediate pressure to articulate a coherent strategy for its diverse portfolio of sugar, ingredients, grocery, and agriculture businesses to justify its valuation as a focused food company. Confidence: High. [Long-term] Digital Transformation Acceleration for Primark — Independence will likely enable Primark to accelerate investments in digital tools and e-commerce capabilities, addressing its current vulnerability to online rivals and adapting to evolving consumer shopping habits. Confidence: High. [Medium-term] Potential for M&A Activity in Food Sector — A more focused 'FoodCo' could become a more attractive target or acquirer in the food industry, as its strategic direction becomes clearer and its valuation less obscured by the retail arm. Confidence: Low.

Economic Indicators

→ FTSE 100 Index — The demerger of a significant FTSE 100 constituent will lead to adjustments in index composition and potentially minor shifts in overall market sentiment, but not a directional change.

→ Consumer Confidence (UK/Europe) — Primark's mixed performance in Europe and the mention of weaker consumer confidence suggest this indicator remains a key factor influencing retail sector performance, but the demerger itself does not directly alter it.

→ Retail Sales (UK/Europe) — Primark's future performance as an independent entity will contribute to these figures, but the demerger itself is a corporate event, not a direct driver of overall retail sales.

→ Agricultural Commodity Prices — The food arm of ABF is exposed to commodity cycles for sugar and agricultural inputs; these prices will continue to influence its profitability but are not directly impacted by the demerger.

→ Corporate M&A Activity — The demerger is a significant corporate restructuring event, and its success or challenges could influence the broader trend of corporate splits and consolidations, particularly in the UK.

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This article first appeared on GuruFocus.

Exploring the Strategic Moves of Yacktman Focused Fund (Trades, Portfolio) in Q1 2026

Warning! GuruFocus has detected 9 Warning Signs with XKRX:005935. Is XKRX:005935 fairly valued? Test your thesis with our free DCF calculator.

Yacktman Focused Fund (Trades, Portfolio) recently submitted its N-PORT filing for the first quarter of 2026, shedding light on its strategic investment decisions during this period. Managed by Yacktman Asset Management (Trades, Portfolio), the fund aims for long-term capital appreciation and, to a lesser extent, current income. It is non-diversified, primarily investing in common stocks of both domestic and foreign companies, regardless of size, with some dividend-paying stocks. The investment team is known for its objective, patient, and diligent approach, focusing on the merits of individual securities rather than market forecasts. Yacktman employs a disciplined strategy, seeking growth companies at low prices, blending "growth" and "value" investing. The fund typically looks for companies with good business models, shareholder-oriented management, and low purchase prices.Yacktman Focused Fund Reduces Stake in Samsung Electronics Co Ltd by 5.42%

Summary of New Buy

Yacktman Focused Fund (Trades, Portfolio) added a total of three stocks in the first quarter of 2026:

The most significant addition was Associated British Foods PLC (LSE:ABF), with 2,500,000 shares, accounting for 2.51% of the portfolio and a total value of 62.58 million. The second largest addition was PayPal Holdings Inc (NASDAQ:PYPL), consisting of 545,000 shares, representing approximately 0.99% of the portfolio, with a total value of $24,650,350. The third largest addition was Legacy Housing Corp (NASDAQ:LEGH), with 445,000 shares, accounting for 0.37% of the portfolio and a total value of $9,091,350.

Key Position Increases

Yacktman Focused Fund (Trades, Portfolio) also increased its stake in one stock:

The most notable increase was in Hyundai Motor Co (XKRX:005387), with an additional 181,380 shares, bringing the total to 600,000 shares. This adjustment represents a significant 43.33% increase in share count, a 1.14% impact on the current portfolio, with a total value of ?93,884,300.

Summary of Sold Out

Yacktman Focused Fund (Trades, Portfolio) completely exited one holding in the first quarter of 2026:

Warner Bros. Discovery Inc (NASDAQ:WBD): The fund sold all 400,000 shares, resulting in a -0.48% impact on the portfolio.

Key Position Reduces

Yacktman Focused Fund (Trades, Portfolio) also reduced its position in seven stocks. The most significant changes include:

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Reduced Samsung Electronics Co Ltd (XKRX:005935) by 2,100,000 shares, resulting in a -30% decrease in shares and a -5.42% impact on the portfolio. The stock traded at an average price of ?121,408 during the quarter and has returned 36.69% over the past three months and 64.13% year-to-date. Reduced Hyundai Motor Co (XKRX:005385) by 280,000 shares, resulting in a -44.44% reduction in shares and a -1.67% impact on the portfolio. The stock traded at an average price of ?260,976 during the quarter and has returned -11.23% over the past three months and 22.39% year-to-date.

Portfolio Overview

As of the first quarter of 2026, Yacktman Focused Fund (Trades, Portfolio)'s portfolio included 42 stocks. The top holdings were:

15.89% in Samsung Electronics Co Ltd (XKRX:005935) 11.16% in Canadian Natural Resources Ltd (NYSE:CNQ) 9.42% in Bollore SE (XPAR:BOL) 4.35% in Hyundai Mobis Co Ltd (XKRX:012330) 3.77% in Hyundai Motor Co (XKRX:005387)Yacktman Focused Fund Reduces Stake in Samsung Electronics Co Ltd by 5.42%

The holdings are mainly concentrated in nine of the eleven industries: Technology, Communication Services, Consumer Defensive, Energy, Consumer Cyclical, Industrials, Basic Materials, Financial Services, and Healthcare.

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The big moves keep coming from Associated British Foods, now with the much-contemplated spin-off of its food assets and clothes retailer Primark into two FTSE-listed companies.

That separation is expected to be completed before the end of 2027 and will create on one side ABF FoodCo, which will become, in group CEO George Weston’s words “the only FTSE-100 pure-play food producer”.

“This is quite a big day for us,” Weston said as he concluded an almost two-hour-long call with analysts today (21 April) to discuss the demerger and ABF's latest financial results. “It's quite a big day and we have to remember that.”

Those numbers for the first half, which showed a decline in sales, operating profit and baseline earnings for the group, and similarly in grocery, were overshadowed somewhat by the split announcement.

The decision to divide up ABF's business follows a significant deal within the conglomerate's grocery business announced last August when the company unveiled a deal to acquire UK bread rival Hovis, a transaction currently going through the country's competition process.

Setting the scene for ABF's food business today, Weston said: “We built a differentiated, really quite different global food group that operates across multiple parts of the food-supply chain. It gives us resilience. It positions us well for long-term structural growth trends that we see in food demand.

“At the heart of the business are strong brands and ingredients platforms. We inevitably, because we just do, have a well invested asset base. These characteristics will allow us effectively to compete and to grow. In turn, it will enable us to deliver attractive, sustainable returns to shareholders.”

Investor backing

With Primark out of the way, the food-focused business will feature grocery, sugar, ingredients and agriculture assets – namely grains and animal feed – amounting to total annual revenues of around £9.8bn ($13.2bn).

By their nature, those divisions are likely to remain separate reporting entities within the new company post the demerger, although the finer details have yet to be ironed out.

Wittington Investments, ABF’s largest shareholder, has backed the separation and will retain majority ownership in both companies post the split.

Weston gave an essence of ABF’s investor role during today’s Q&A session and what the new set-ups might look like.

“We haven't said anything officially about balance sheet structure. I think you can look through to the Whittington majority control of both and assume that there's a degree of conservatism that's going to characterise the structure, the balance sheets of both companies. But let me not say anything more on that.”

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At the moment, the combination of the two hold some investors back ABF CEO George Weston

Nevertheless, he suggested two separate companies within ABF might be a more attractive proposition for investors than the current business as a whole.

“Individual investors, presented with the biggest international retailer on the FTSE, and the only largely pure-play food company on the FTSE, will have, I think, really interesting things that they might want to invest in, where, at the moment, the combination of the two hold some investors back. That's really the governance story,” the CEO explained during the Q&A.

Weston also suggested M&A could play a part for the new food business after split transaction, both acquisitions and disposals, with the Australian meat business singled out as a potential divestiture candidate.

“If you're going to access, as we want to, new markets, new growth opportunities, M&A has got to be part of it. And then the existing holdings – you've got to be sure that it really is a cash cow. Otherwise, there's no point to it.”

He added: “Australia meat, we still need to do something with. It's not the biggest thing out there but it neither ticks the cash cow box nor the growth box. So, what are we going to do?”Credit: @DonSmallgoodsOfficial/Facebook

H1 results

Weston acknowledged ABF was aware the first half of its financial year “was going to be challenging” but he is confident in a pick-up in the second half. Sales revenue for the group in the 24 weeks to 28 February dropped 2%, while grocery was flat, both in constant-currency terms.

Operating profits also declined, with a 9% slide on the net earnings before tax front for the group to £632m.

Pressure points were weaknesses in US consumer spending in bakery ingredients and cooking oils, namely the Mazola retail brand, which was hit by the Hispanic population cutting back spending.

Meanwhile, the Twinings tea brand had “good volume-led growth”, which Weston said will be supported in the second half by new innovation in cold formats.

The Asian food brand Blue Dragon also posted volume growth in the UK and overseas, while Patak's sauces benefited from product launches. Granola under the Jordans line also helped sales.

ABF’s profits in grocery were partially hit by higher cocoa prices, particularly on the Ovaltine drinks brand, while US tariffs on international products also weighed.

Weston said cocoa prices have now “peaked”, with new hedging positions at lower prices expected to add to the second-half improvement.

The CEO expressed some optimism around brands housed in the World Foods part of the portfolio such as Al’fez and Capsicana cooking aids, and the Anthony’s range of health foods such as seeds, oats and protein powders. The High5 sports nutrition brand also presents opportunities, he said.

“They're brands that are small but very successfully accessing niche categories of food and niches where there are good growth prospects,” Weston explained.

“If you take all those businesses together, they only have sales of about £100m. Their combined sales growth in half-one was about 20%. We like these categories, and we can manage these sorts of businesses because of how we are organised. So we can be in smaller scale but in fast-growing areas of the food market.”

Weston said ABF is seeing “explosive growth” in the sports nutrition category, with sales up more than 30% in the first half led by hydration products.

Middle East conflict

The Iran war was obviously a topic of discussion as the two-week ceasefire agreement with the US is due to end tomorrow, with talks scheduled to be held in Pakistan today.

Weston said the primary impact for ABF is energy costs, but also from freight, packaging and agri-chemicals and, in the case of Primark, fabrics.

“Given what we know today, and given the hedges that we have in place, we expect to be able to manage the cost impacts that we're seeing through the rest of 2026,” he explained. “The longer-term cost impact is not yet clear, and we need to remain agile as things evolve.

“We're not seeing shortages of raw materials. We're just seeing the likelihood of inflation in them.”

He also singled out Primark’s exposure to the potential for consumers paring back spending as costs in the economy rise, but there, the knock-effect could be more widespread.

“We're also focused on the impact on consumer spending, particularly for Primark. We've seen what we think is an impact in just the last couple of weeks in Primark sales, really across the whole of Europe. And there must be a risk that, if the conflict persists, consumer spending will keep on being subdued.”

Sugar losses

Sugar was the stand-out downside element of ABF’s latest results, where the division booked an operating loss due to what Weston said were “prolonged low average selling prices in Europe”.

Adding some perspective with a touch of optimism, he said: “The crop last year was, sadly, better than we'd expected. Acreage was down but yields were up. The market is still long sugar in Europe.

“We firmly believe that the European sugar businesses are capable of generating a lot of cash in years to come, even in a market with a long-dated trend and volume decline.

“There's one potential bit of upside. There are some very big sugar refineries blockaded at the moment in and around Dubai and supply well over a million tons of white sugar into the area. But Europe's got a fair amount of white sugar available if some of these markets want it.”

Looking ahead to the second half of ABF's year, Weston reiterated the weighting the company has priced in for the remaining six months of the year.

“Despite the damp financial results, we continue to invest in marketing, innovation, technology and capacity, all to drive growth, and this has set us up well, I think, for strong improvements in profit in the second half.”

"“This is quite a big day for us” – key takeaways as ABF splits food from Primark" was originally created and published by Just Food, a GlobalData owned brand.

The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.

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The billionaire family behind Primark is to spin off the fashion chain from its food business, breaking up one of Britain’s biggest consumer conglomerates after 65 years.

Associated British Foods (ABF) said it planned to split Primark off by the end of 2027, paving the way for a separate listing on the FTSE 100.

ABF is listed on the London Stock Exchange but around 60pc of its shares are owned by the Weston family’s Wittington Investments. The conglomerate is one of the world’s biggest sugar producers and also owns brands including Ovaltine, Hovis and Twinings.

Analysts have predicted that a separate listing of Primark, which has 486 stores across 19 markets, could see it valued at a similar level to rivals such as Next, which is worth more than £16bn.

George Weston, the chief executive and a member of the controlling Weston family, will become chief executive of the food business, while Eoin Tonge will continue to lead Primark who took over as interim chief executive last year.

Mr Weston said there were “a lot of good things that will come from this separation”, adding that Primark was “very capable of standing on its own two feet” and would benefit from having a board of non-executives who had specific retail experience.

He said ABF’s food business, meanwhile, had been “under appreciated because most of the interest has inevitably been around Primark”.

Plans to press ahead with the separation come despite warnings from ABF that the war in Iran was likely to hit consumer spending.

Mr Weston said there was a “risk to Primark sales if the conflict persists and consumer spending deteriorates”.

“Based on the last couple of weeks, we’ve seen sales right across Europe reduce, but we just don’t know,” he said. “Some of our customers may stop shopping, but some other customers might start shopping at Primark because they see value there.”

Mr Weston said inflation from the Middle East conflict was likely to be “manageable” this year. ABF had locked in energy prices in advance, helping to limit the impact of the shock.

By July and August, though, he said ABF would “become increasingly exposed to the higher costs, should they still be in place”.

The situation “might resolve itself before those extra costs come through the system”, he added.

Mr Weston said ABF had not yet seen any disruption to shipments. One vessel carrying its goods passed through the Suez Canal last weekend. Some freight companies have been avoiding the Egyptian waterway over fears of spillover from the conflict nearby.

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Shares in ABF slumped as much as 5pc to £17.90 on Tuesday. Analysts at Barclays said this was likely driven by the “cautious commentary” about Primark sales, as well as weaker-than-expected profits in its sugar business.

ABF posted a 2pc fall in revenue to just under £9.5bn in the 24 weeks ending February, while profit declined by 9pc to £632m.

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