Premier Foods’ £80m rate note marks turnaround for business
The partial redemption of the producer’s outstanding £210m – due in July 2022 – would help the group save more than £4m per year in interest costs, it claimed, and represented a “clear demonstration of its cash-generating characteristics”.
Julian Wild, corporate finance director at law firm Rollits, said the latest news from Premier’s camp was a definite sign of the business turning a corner.
“There is better management in place and the market has a little more confidence in its performance,” said Wild.
‘Heading in the right direction’
“The lockdown has been good for Premier’s ambient brands and this should be a better year for the company. But it still has a large debt burden and some way to go – heading in the right direction, all the same.”
Premier Foods had previously been described as zombie-like by analysts at Shore Capital, with industry insiders advising the firm to slim down the business in order to manage its debt.
Earlier this year, Shore’s head of research Clive Black described the manufacturer’s financial situation as a “sustained car crash” and said the business was carrying the heavy burdens of a flawed strategy of expansions, implemented by the former management team.
‘Sustained leading position’
“What Premier has done since Messrs Schofield & Co., is diligently work with its brand portfolio and the resources at its disposal – building year-on-year – to good effect to sustain and increase what were and are already very healthy category-leading positions and trading margins,” Black added.
Meanwhile, the ongoing coronavirus crisis has forced brewing giant Marston’s to agree £70m of additional liquidity through an increased bank facility, as it waits for pubs to reopen.
It hoped the additional funds – plus continued Government support on employment costs, deferred tax payments, rent and rates relief and income from beer sales into the off-trade – would help the brewer meet its financial obligations.
