Premier Foods’s sales boosted by strategic partnerships

By Gwen Ridler

- Last updated on GMT

Premier posted sales growth in its third-quarter results, boosted by its partnerships with Nissin and Mondelēz
Premier posted sales growth in its third-quarter results, boosted by its partnerships with Nissin and Mondelēz

Related tags Premier foods

Premier Foods has posted continued sales growth in its third-quarter trading statement, boosted by its partnerships with Nissin Foods Group and Mondelēz International.

Group sales were up 4% to £261.4M for the 13 weeks ending December 30 2017, while year-to-date group sales grew 2.6%.

Premier’s branded grocery sales rose 3.4% in the third quarter of the year, while its non-branded (own-label) grocery sales saw an increase of 13.9%.

However, the manufacturer saw a significant drop in branded sweet treats sales, down 7.3%, which were propped up by much stronger non-branded sales of 19.6%.

Non-branded sweet treats sales benefitted from increased volumes of mince pies compared with the prior year, claimed Premier. It sold 220M pies in 2017, about 4M more than the prior year.

Strategic partnership with Nissin

Premier attributed its continued sales growth to its strategic partnerships with noodle firm Nissin and global giant Mondelēz.

The Batchelors brand experienced its fourth successive quarter of sales growth, reflecting the continued benefits of the company’s strategic partnership with Nissin.

Batchelors Super Noodles raked in more than £5M in sales since its launch last year, while Soba Noodles made £2M since Premier acquired the distribution rights from Nissin.

The Mondelēz partnership continued to reap benefits for Premier, as Cadbury cake sales continued to grow strongly in international markets.

This was offset by lower sales in the UK, due to short-term capacity constraints, according to the manufacturer.

International sales grew 26%, reflecting continued strong progress in Australia, the launch of Mr Kipling and Cadbury cake in New Zealand and a number of new customer listings for Sharwood’s cooking sauces in Europe and the US.

Strong progress in Australia

Ceo Gavin Darby said: “We delivered another good quarter of growth, with sales up 4.0% in quarter three and 2.6% in the first three quarters of the year.

“Our International business produced another excellent quarter and our partnerships with Nissin and Mondelēz International continue to deliver strong performances, demonstrating their strategic benefits to us.”

Commenting on Premier’s results, Clive Black of market analyst Shore Capital judged them as a mixed bag.

“Overall revenue growth is good, sustaining the better momentum recorded in quarter two. However, the mix of sales is perhaps a little more mellow, noting that private label drove the top-line,”​ said Black.

“Additionally, and more disappointingly no doubt, a number of operational matters deprived Premier of a rare beat to market expectations and so an upgrade to forecasts. Accordingly, capacity issues in cake, distribution niggles and some new industry jargon – sub-optimal promotional activity – held back bottom-line progress.”

Shore Capital maintained its hold rating on Premier’s stock.

Meanwhile, Premier has quashed rumours that it planned to sell its Batchelors brand to Nissin, after media reports claimed a deal between the two companies ​was about to be agreed.

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