finance

Primark Goes Solo as Parent AB Foods Plans Split From Food

Source: Bloomberg Business

Morning, I'm Louise Moon from Bloomberg UK's breaking news team, bringing you up to speed on today's top business stories.

Primark's parent has decided it's time for the budget retailer to fly the nest.

Having reviewed the situation since November, AB Foods plans to split Primark from the rest of its business (food) by the end of next year. Both will still be majority owned by the founding Weston family and listed on the FTSE 100.

The ultimate aim is to improve the food unit, which includes breakfast classics Jordans and Twinings, as well as its sugar operations. Sugar has been a drag for years.

Meanwhile Primark -- or Penneys, if you're Irish - has been propping things up, accounting for the majority of operating profit. And the group has been largely followed by retail analysts, not food specialists. It was always a rather odd combination.

Still, the split comes at a tough time for retail as the Iran war hits consumer confidence. Primark's trading has been softer of late, while sugar continues to be weak. A lot to nurture. Shares shed 5.9%, extending losses this year.

What's your take? Ping me on X, LinkedIn or drop me an email at lmoon13@bloomberg.net. Oh, and do subscribe to Bloomberg.com for unlimited access to trusted business journalism on the UK, and beyond.

What We're Watching

UK firms stepped up job cuts last month, more so than expected, in a sign the Iran war is piling renewed pressure in the labour market. More from my colleague Kit below.

Homebuilder Crest Nicholson cut its sales and profit guidance, citing prolonged higher interest rates and weakening consumer confidence. It's now focused on preserving cash. Shares shed 21%.

Steps to delink power and gas prices will be announced today, including a voluntary fixed-price subsidy for older wind and solar farms. The aim is to cut costs of green electricity by reducing exposure to gas, which has surged in price.

Plus, Starmer has so far managed to cling on as the fallout from the Mandelson saga continues. In parliament yesterday, the PM apologised for the US envoy appointment and essentially blamed civil servants for not informing him that Mandelson had failed the security vetting. Now, the showdown begins. Former foreign office chief Olly Robbins, who approved Mandelson's clearances and was fired by Starmer last week, is giving his own evidence in a few hours.

Global Catch-Up

Trump aims to seal an Iran deal and says a truce extension is unlikely.
Putin's high-tech Russian submarines goad NATO far below the Atlantic.
Apple's Tim Cook hands over the reins after his record-setting tenure.

Markets Today: Messy Data

Here's your daily snap analysis from Bloomberg UK's Markets Today blog:

It's hard to get a clear picture of the state of the UK labour market, given the revisions, caveats and disclaimers littering the data.

Firstly, the wage and unemployment data relates to February, so it's already outdated given that the focus has been squarely on the Iran war and its impact on the economy.

Secondly, revisions to previous readings muddy the picture. The topline wage growth number saw the prior month's reading revised up to 4.1% from 3.9%, which means that the slowdown to 3.8% was actually more pronounced.

In terms of the caveats, the ONS advises caution regarding interpreting certain time periods due to a volatility in estimates. While the statistics body has said that it's seen an improvement in the response levels to the survey, there is still more that can be done.

Overall, it makes it hard to get a read on the state of the jobs market and the trends driving it.

What's Next

March inflation data is due tomorrow and is likely to accelerate, in another early indication that the war is impacting Britain's economy. Bloomberg Intelligence expects that pressure to build in the months ahead.

Plus, a first-quarter update from Dettol and Durex parent Reckitt.

Pub Quiz

London tube drivers are set to strike from midday today, in the first of several walkouts that'll spark commuter chaos. More are planned in May and June. What are they striking over?

[Yesterday's answer: Chinese firm Honor's robot won a Beijing half marathon on Sunday in 50 minutes and 26 seconds, beating humans and the world record.]