Premier Foods posts strongest sales in five years

By James Ridler contact

- Last updated on GMT

Premier Foods reported its strongest sales growth in more than five years
Premier Foods reported its strongest sales growth in more than five years
Premier Foods has reported its strongest sales growth in more than five years in its full-year results for the 52 weeks ending 31 March 2018.

Revenue for the company was up 3.6% to £819.2m for the year, boosted by a strong performance by its non-branded sales – up 12.1% in grocery and 16.9% in sweet treats. International sales were up 25%.

Branded grocery sales grew 3.4% to £498m, led by increased revenues of 10.6% for its Batchelors brand. This had been supported by the launch of Super Noodles pots and Pasta ‘n’ Sauce pots.

Sweet treats sales were up 1.2% to £230m compared with last year. However, branded sales were down 3.2%, triggered by lower branded cake sales in the UK.

Lower branded cake sales

Premier’s adjusted profit before tax grew 5.9% to £78.6m, up from £74.2m in the previous year. Operating profit increased 12.7% to £69.3m due to a reduction in restructuring costs to £8.5m from £15.8m in the 2016/17 period.

The company’s net debt was reduced by £26.8m to £496.4m. Earnings per share were up 0.2p to 0.9p.

Commenting on the results, chief executive Gavin Darby said there were three important drivers of Premier’s performance – innovation, its international business and its partnerships with Nissin and Mondelēz International.

International has been the star performer with sales growing +25%, and are almost double the level of three years ago, while the benefits from our Nissin and Mondelēz International partnerships together contributed 55% of our revenue growth.”

“In the year ahead, we expect to make further progress on our key priorities, building on the strong momentum we created in 2017/18.”

Faced many challenges

Clive Black, head of research at Shore Capital, said Premier had faced many challenges, but was pleased to see the company come out on top.

“Clearly a lot of hard work has come to the forefront here, noting sustained effort to improve efficiency, the product portfolio and the market penetration​,” said Black. “It is particularly pleasing to see internationalisation coming through for the Group especially in Australia.

“There is no doubt that the cold, grey, wet and windy weather that deflated the British mood for much of​ [this year] worked to Premier’s favour as a major supplier of comfort foods to the nation – as such Premier made hay whilst the sun did not shine.”

Meanwhile, Premier Foods was among a number of Food and Drink Federation members who had reformulated their products to contain less salt, sugar and calories, according to a new report.

Related topics: Business News, Bakery, Confectionery

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