Group sales were down 2.2% to £255.6m for the reported period, representing a loss of £5.8m compared with the same time last year. The manufacturer attributed this loss to decreased sales of lower margin non-branded sweet treats, down 20.7%.
In a statement issued with the results, Premier said: “This was due to the business experiencing lower sales volumes as a result of implementation challenges associated with its logistics programme. However, customer service levels improved steadily during the quarter.
“Additionally, the Sweet Treats business exited a number of lower-margin seasonal and non-seasonal cake contracts. In the Grocery business, non-branded sales increased 2.5% as contract wins in stuffing and cooking sauces were partly offset by lower sales at Knighton Foods.”
Branded sales up
Continued growth of the Mr Kipling brand helped Premier claw back sales across the branded sweet treats sector (up 2.7%), while UK Grocery sales were up 2.7% thanks to the Batchelors brand’s eighth quarter of consecutive growth.
Commenting on the results, chief executive Gavin Darby said: “We faced into two sets of challenges in the quarter – lower International sales and our logistics programme, which, as expected, affected cake sales volumes early in the quarter.
“As we look to the fourth quarter, we expect to see a good performance from Branded Sweet Treats, we have a good innovation plan lined up and our expectations for trading profit and adjusted earnings per share for the full year are unchanged.”
Meanwhile, Premier Foods also revealed that chief financial officer Alastair Murray is to step into the role of acting chief executive to fill the gap that will be left by departing boss Darby.
Darby announced in November that he would step down from the position on 31 January, his sixth anniversary of joining the manufacturer. Premier continues to look for a permanent replacement.
Meanwhile, raw material cost increases and deflationary pressures hit Princes Foods’ pre-tax profit in the past financial year, according to a spokesperson for the business, although the company succeeded in boosting sales.
Premier Foods results at a glance
- Quarter 3 (Q3) group sales down (2.2%) as its previously reported logistics programme impacted Sweet Treats sales
- Q3 Branded sales up 0.2% (compared with the previous quarter) and up 0.4% year to date
- Q3 UK Grocery sales, excluding International, up 2.7%
- Market share gains in major brands
- Continued Mr Kipling growth with sales up 5% in Q3 and 10% year to date
- Lower-margin non-branded Sweet Treats sales down (20.7%)