Premier Foods’s sales boosted by ‘strategic’ partnerships

Sales grew 1.5% to £353.3M in the 26 weeks ending September 30. Premier’s second quarter sales were up 6.2% compared with the previous quarter.

More than 40% of the company’s growth had been driven by partnerships with instant noodle manufacturer Nissin and global food giant Mondelēz International.

Ceo Gavin Darby said: “We completed the signing of the new Mondelēz International Global Strategic Partnership in the first half of the year and, through our partnership with Nissin, Batchelors is now the fastest growing major brand in our portfolio following the launch this year of convenient pot format products such as Super Noodle Pots.”​

Premier’s grocery business unit reported half-year sales of £255M, up 1.9% on the same period last year. Branded sales grew by 0.9% to £214.7M, while non-branded sales rose by 7.4% to £40.3M.

Non-branded sales grew​

The company’s Sweet Treats division reported sales growth of 0.7% in the first half of the year to £98.3M. Non-branded sales grew 17.0% to £17.6M, while branded sales experienced a drop of 2.3%.

Premier’s adjusted profit before tax saw a slight increase of 0.5% to £26.3M, while its operating profit grew by 2.3% to £22.5M.

Darby added: “Our International business continues to go from strength to strength and saw revenue growth of 23% in the first half of the year.​

“Overall, we continue to expect the business to make progress in the second half of the year and our expectations for the full year remain unchanged.”​

‘Treat for investors’​

Commenting on the results, Fiona Cincotta, senior market analyst at business consultancy City Index, said Premier’s growth was a big turnaround for the company and a “treat for investors”.​

“It's way too early to suggest that Premier Foods has a new lease on life – the bar was low coming into this result. But a return to first-half sales growth indicates investments in product innovation and marketing are reinvigorating the appeal of its brands.”​

Premier’s successful half-year results bucked a trend of financial distress experienced by UK food and beverage manufacturers in the past year, according to consultancy Begbies Traynor.

Begbies Traynor’s latest Red Flag Alert research, which monitors fluctuations in financial distress across the UK economy, found 8,399 businesses in the sector showed signs of distress during the third quarter of 2017, compared with 7,072 for the same period last year.

Meanwhile, in September, Premier signed a five-year deal with Mondelēz International​ to continue producing and marketing Cadbury-branded cakes and ambient desserts.