City analysts said the capital restructuring plan would put the company on a much firmer footing than it has been for many years. It was organised with the help of adviser Ondra Partners and revealed as Premier’s chief executive Gavin Darby reported 17.7% growth in trading profit to £145.2 for 2013 financial year.
In its results for the year, sales in the underlying business, excluding milling, were up by 1.1% to £1,282.5M, while grocery brand sales grew 2% to £543.5M. Adjusted profit before tax rose to £86.8M and net debt was cut by £120M to £831M at the end of last year.
The refinancing plan includes an underwritten equity issue of £353M, £500M of senior secured loan notes and a simplified £272M retained cash flow, together with a pension scheme agreement that reduces Premier’s cash contributions by £161M.
The news came after Premier’s announcement in January of a £87.5M joint venture with the US-based Gores Group to run its Hovis bread and flour business.
Shore Capital analysts Clive Black and Darren Shirley, described the “transformational deal” in glowing terms, noting “management can now press on with running a high-margin branded grocery business, where we expect solid growth and a return to dividend payments”.