Premier Foods bottom in share performance table

By Rod Addy & Laurence Gibbons

- Last updated on GMT

Related tags Hilton food group Palm oil

Premier Foods shares underperformed the UK market by 38%
Premier Foods shares underperformed the UK market by 38%
Premier Foods is rock bottom of a 23-strong list of consumer staples manufacturers judged by share value performance in the past full month issued by Panmure Gordon.

The list, which highlighted the absolute performance of the firms and included non-food businesses, put Premier 23rd​. Even by relative share performance over a 12-month period to June, Premier limped in at second to last place.

“Premier Foods has been the weakest performer over the past month falling 11%,”​ stated Panmure Gordon analyst and director Damian McNeela.

‘Traded in a flat line’

Referring to a graph of Premier’s share performance since the third quarter of 2011, McNeela told “If you look at that chart, the shares haven’t really done anything from July 2012. They have traded in a flat line.”

The backdrop of Premier’s struggles with total debt and pensions deficits was well-known and had been going on for some time, he stated.

A recent analyst note from Martin Deboo of Investec outlined six key struggles for Premier. These were: mapping consumer demand uncertainties, reducing borrowing; grappling with its pension deficit; managing retailer relations; fluctuating commodity costs and tax.

In descending order, the top 10 companies based on monthly absolute share performance according to McNeela were:

  • New Britain Palm Oil
  • Britvic
  • Greencore
  • Cranswick
  • MP Evans
  • Nichols
  • Hilton Food Group
  • Imperial
  • PZ Cussons

“New Britain Palm Oil has been the top performer over the past month rising by 25%, in part reflecting the recent improvement in crude palm oil prices,”​ McNeela stated.

Among other runners and riders, McNeela singled out ready meals and sandwich manufacturer Greencore, consumer products giant Unilever and Hilton Food Group for positive mentions.

Greencore ‘top performer’

“On a 12 month view Greencore has been the top performer in our coverage universe outperforming the UK market by 47%.”

Unilever had the “ability to deliver superior growth from its attractive emerging market positions”,​ stated McNeela. However, “we would like to see it find more acquisitions given the successes of ​[personal and household care firm] Alberto Culver and ​[Russian beauty company] Kalina”.

Meat packaging firm Hilton Food Group had “a resilient business model, exciting growth opportunities and a strong balance sheet”, ​McNeela stated.

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