Founder, CEO, GSBR Research

Garvit Bhandari

Founder, CEO

Leading Provider of Equity and Investment Research

GSBR Research

We are an independent equity research provider focused on covering global markets. The aim of the research is to provide an unbiased view of the fundamentals of the company.

Event-Driven

<ul>
<li>
Separation targets completion before end-2027. Structured as a dividend demerger, ABF shareholders receive shares in both entities, both anticipated FTSE 100 constituents, subject to clearances and regulatory approvals.</li>
<li>
Conglomerate discount is real and large. SOTP implies Primark at 4-5x EV/EBITDA, less than half the Apparel sector median of 10.3x. Demerger could result in re-rating.</li>
<li>
Re-Rating is conditional, not automatic. Primark's Continental European LFL running at -5.6% and margin compressed 200 bps to 10.1% must reverse before a standalone multiple expansion materialises.</li>
</ul>



Separation targets completion before end-2027. Structured as a dividend demerger, ABF shareholders receive shares in both entities, both anticipated FTSE 100 constituents, subject to clearances and regulatory approvals.

Conglomerate discount is real and large. SOTP implies Primark at 4-5x EV/EBITDA, less than half the Apparel sector median of 10.3x. Demerger could result in re-rating.

Re-Rating is conditional, not automatic. Primark's Continental European LFL running at -5.6% and margin compressed 200 bps to 10.1% must reverse before a standalone multiple expansion materialises.


ABF/Primark Spin-Off – Does the Demerger Unlock Value?

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>ABF confirms Primark demerger, removing key uncertainty; shares down 17% since November, suggesting execution and timing concerns dominate despite clearer structure and shareholder support.</li>
<li>Revised SOTP of £25.5/share implies ~39% upside; valuation gap persists after incorporating £75m separation costs and £45m dis-synergies, indicating market underpricing of structural value.</li>
<li>Investment case shifts to execution phase; we favour long ABF (outright or hedged) as investors are paid to wait for re-rating ahead of 2027 separation and improved capital allocation.</li>
</ul>


ABF confirms Primark demerger, removing key uncertainty; shares down 17% since November, suggesting execution and timing concerns dominate despite clearer structure and shareholder support.
Revised SOTP of £25.5/share implies ~39% upside; valuation gap persists after incorporating £75m separation costs and £45m dis-synergies, indicating market underpricing of structural value.
Investment case shifts to execution phase; we favour long ABF (outright or hedged) as investors are paid to wait for re-rating ahead of 2027 separation and improved capital allocation.


ABF: Primark Demerger Confirmed, but the SOTP Gap Remains

<ul>
<li>ABF’s structural review could separate Primark from Food, unlocking value through clearer governance and capital allocation focus.</li>
<li>Our SOTP yields £26/share base case, implying ~17% upside to current price.</li>
<li>Event-Driven setup favours long ABF vs discretionary peers into April 2026 review conclusion.</li>
</ul>


ABF’s structural review could separate Primark from Food, unlocking value through clearer governance and capital allocation focus.
Our SOTP yields £26/share base case, implying ~17% upside to current price.
Event-Driven setup favours long ABF vs discretionary peers into April 2026 review conclusion.


ABF - Primark Separation: Governance Reset or Value Catalyst?

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>We continue to view the latest pullback as healthy/normal within the ongoing bull market, and it is quite possible that the lows have been established on MSCI ACWI (ACWI-US).</li>
<li>Upgrading EM to Market Weight; MSCI Emerging Markets, China (shanghai Composite) and Hong Kong (Hang Seng) Still Bottoming; we discussed buying in our February 23, 2024 Int'l Compass
</li>
<li>Commodities all appear to be rolling over near resistance, which is what we discussed to watch for in our April 18, 2024 Int'l Compass. This has bullish implications for ACWI</li>
</ul>


We continue to view the latest pullback as healthy/normal within the ongoing bull market, and it is quite possible that the lows have been established on MSCI ACWI (ACWI-US).
Upgrading EM to Market Weight; MSCI Emerging Markets, China (shanghai Composite) and Hong Kong (Hang Seng) Still Bottoming; we discussed buying in our February 23, 2024 Int'l Compass

Commodities all appear to be rolling over near resistance, which is what we discussed to watch for in our April 18, 2024 Int'l Compass. This has bullish implications for ACWI


Upgrading Emerging Markets to Market Weight; China/Hong Kong Continue to Bottom; Energy Breakdowns

TSE Tokyo Price Index TOPIX / Technical Analysis

<ul>
<li>The MSCI ACWI index ACWI-US briefly fell below major support at $90.50-$91.50, though we do not consider it a "decisive" breakdown and we now see a false breakdown (bullish).</li>
<li>On MSCI ACWI (local currency), a false breakdown appears to already be in place, which is bullish as long as the index does not break to a new low.</li>
<li>MSCI EM (EEM-US) continues to hold above $36.50-$37 support, while MSCI ACWI ex-US (ACWX-US) and EAFE (EFA-US) remain above supports at $45 and $65-$66, respectively. Pullback is likely over.</li>
</ul>


The MSCI ACWI index ACWI-US briefly fell below major support at $90.50-$91.50, though we do not consider it a "decisive" breakdown and we now see a false breakdown (bullish).
On MSCI ACWI (local currency), a false breakdown appears to already be in place, which is bullish as long as the index does not break to a new low.
MSCI EM (EEM-US) continues to hold above $36.50-$37 support, while MSCI ACWI ex-US (ACWX-US) and EAFE (EFA-US) remain above supports at $45 and $65-$66, respectively. Pullback is likely over.


Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

United Kingdom

Associated British Foods plc is a diversified international food, ingredients, and retail group. Its operations span five segments: Grocery, Ingredients, Agriculture, Sugar, and Retail, which includes the Primark fashion chain. The company manufactures a wide array of products, from hot beverages and baked goods to sugar, animal feeds, and specialty ingredients for various industries. Headquartered in London, England, the company was founded in 1935.

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Associated British Foods (ABF LN)

ABF/Primark Spin-Off – Does the Demerger Unlock Value?

ABF plans to separate by end-2027, potentially unlocking value with Primark's re-rating dependent on improving performance.

GSBR Research

ABF: Primark Demerger Confirmed, but the SOTP Gap Remains

ABF has confirmed the Primark demerger, removing a key uncertainty. Despite this, the shares have weakened, suggesting the market is focused on...

Jesus Rodriguez Aguilar

ABF - Primark Separation: Governance Reset or Value Catalyst?

ABF’s planned Primark spin review offers a clear, time-bound catalyst to close its conglomerate discount—governance clarity, focused management,...

Jesus Rodriguez Aguilar

Upgrading Emerging Markets to Market Weight; China/Hong Kong Continue to Bottom; Energy Breakdowns

Upgrading Emerging Markets $EEM $VWO to Market Weight; China/Hong Kong Continue to Bottom $FXI $MCHI $KWEB; Lows Likely in on $ACWI; Commodities...

Vermilion Research

Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ABF/Primark Spin-Off – Does the Demerger Unlock Value?

​ABF plans to separate by end-2027, potentially unlocking value with Primark's re-rating dependent on improving performance.

GSBR Research

ABF: Primark Demerger Confirmed, but the SOTP Gap Remains

ABF has confirmed the Primark demerger, removing a key uncertainty. Despite this, the shares have weakened, suggesting the market is focused on...

Jesus Rodriguez Aguilar

ABF - Primark Separation: Governance Reset or Value Catalyst?

ABF’s planned Primark spin review offers a clear, time-bound catalyst to close its conglomerate discount—governance clarity, focused management,...

Jesus Rodriguez Aguilar

Upgrading Emerging Markets to Market Weight; China/Hong Kong Continue to Bottom; Energy Breakdowns

Upgrading Emerging Markets $EEM $VWO to Market Weight; China/Hong Kong Continue to Bottom $FXI $MCHI $KWEB; Lows Likely in on $ACWI; Commodities...

Vermilion Research

Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

​The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...

Vermilion Research

ABF plans to separate by end-2027, potentially unlocking value with Primark's re-rating dependent on improving performance.

The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...