City agog for views of new Premier Foods' ceo

By Anne Bruce

- Last updated on GMT

Related tags: Premier foods

Handy promotion: Joanna Lumley promotes Sharwoods
Handy promotion: Joanna Lumley promotes Sharwoods
The City is on tenterhooks as its waits for word from Premier Foods’ new CEO Michael Clarke.

Clarke, who joined the company on August 16, is not scheduled to make any announcements until the company presents its third quarter management statement on October 25.

Clarke’s predecessor Robert Schofield has left after a short handover period, and was described by a source at Premier Foods as “not having surfaced anywhere yet".

Panmure Gordon executive director of equity research, Graham Jones said: “We are certainly waiting with baited breath. There are a whole host of issues Clarke will have to address, although at the moment nothing else matters apart from shoring up the day-to-day business.”

Battered

The share price had continued to decline after rallying on news of Clarke’s arrival, he said and relationships with retailers were “battered".

Premier Foods’ own-label bakery and prepared foods businesses, Avana Bakeries and RF Brookes, were prime candidates to sell as soon as possible, he said.

However, Jones commented: “That business is loss making and has lost a number of orders recently, who would want it? And would it be split or sold as one entity?”

He also suggested that some of the branded businesses would have to be sold off as Clarke moved to rehabilitate the company.

Meanwhile Toby McCullagh of Morgan Stanley said: “I would be pretty surprised if we hear anything from the new CEO before October, it would be good if we did hear something substantial, but I think we can wait a couple of months.”

Contract losses

Another analyst commented that it would be a bad time to sell the own-label label Brookes Avana businesses as the selling price would be hugely discounted given current problems with contract losses.

Branded businesses might be put on the market. Sharwoods for example had been touted as a possible candidate for sale. However, Premier also saw Sharwoods as one of its key brands.

He suggested that Premier Foods would want to focus on getting through its busy Christmas trading period and would then probably have to consider making a rights issue.

“The company has headroom before it breaches its banking covenants, so there is no need to act fast. It is certainly crisis time at Premier, but I would not expect any knee-jerk reactions​,” he said.

Related topics: People & Skills, Ambient foods

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