Premier Foods report strong results, shares rise

Shares rose five percent in early trading.

Premier Foods (LON: PFD) has reported a five percent rise in shares after the group reported an increase in profits and sales last year.

The owner of brands including Mr Kipling and Hovis announced results ahead of expectations, with revenue rising 3.6 percent to £819.2 million in the year to 31 March.

Chief Executive Gavin Darby said: “After a slower start in the first quarter, performance accelerated during the year as planned, with revenue in the second half up 5.3 percent and 7.0 percent higher in quarter four.”

Darby said the driver behind the group’s strong growth was “innovation, our international business and our strategic partnerships with Nissin and Mondelez International”.

The group’s international sales jumped by 25 percent following the new partnerships.

Premier Foods remains optimistic for the coming year.

“Trading profit progress in the year benefitted from this encouraging commercial performance as well as our disciplined focus on cost and efficiency,” said Darby.

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

The group’s profit grew 5.1 percent from £117 million to £123 million. Debt shrank to £496.4 million from £523.2 million.

The company also announced that Batchelors, one of the group’s key brands with Super Noodles under its name, had the highest growth rate and is very profitable despite being in decline just three years ago.

“The Batchelors brand is now the fastest growing in our portfolio having been turned around from decline three years ago to double-digit growth for the past year. This followed the launch of new products designed to meet consumer trends such as Batchelors Super Noodles pots, which sold over 13 million pots in the past year,” said Darby,

In January Premier Foods consulted speculation surrounding the sale of Batchelors. The group said that no discussions had “gone beyond an exploratory stage”