Premier Foods Returns to Revenue Growth

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Premier Foods Returns to Revenue Growth

Premier Foods Returns to Revenue Growth
November 16
09:27 2017

Premier Foods, the UK convenience food group, has reported group revenue of £353.3 million for the 26 weeks ended 30 September 2017 – an increase of 1.5% on the prior period – with Branded revenue in line with last year at £295.4 million while Non-branded revenue increased by 10.1% to £57.9 million. Group reported half year trading profit at £48.0 million was in line with the prior year. Group revenues have been supported in the first half of the year by a combination of benefits from Premier Foods’ strategic partnerships with Nissin and Mondelez International.

The Grocery business unit reported first half revenue of £255.0 million, up +1.9% on the same period a year ago. One of the major contributors to Grocery branded revenue growth in the half was Batchelors, which grew +7.8% in the period and has also increased its category share by nearly two percentage points over the past year. This was supported significantly by the launch earlier this year of the Batchelors Super Noodles Pot product, a product range closely aligned to the consumer trend of snacking and on the go eating.

Sweet Treats delivered revenue growth of 0.7% in the first half of the year to £98.3 million while the International business unit continued to perform very strongly with revenues up 23% on a constant currency basis. Over the last two years, International revenues have progressed at a compound annual growth rate of 18%, and have posted twelve successive quarters of year on year growth in the last three years.

Premier Foods’ strategy is to give an equal focus and weight to growing revenue, delivering cost efficiencies and generating cash. In the UK, a core objective for the group is to grow ahead of its categories and for its International business to deliver strong double-digit growth. The group is focused on reducing its leverage ratio to below 3.0x in approximately 3-4 years through profit improvement and debt reduction.

Gavin Darby, chief executive of Premier Foods, comments: “We are pleased to report a return to revenue growth of +1.5% in the first half of the year. A key highlight was our strong performance in the second quarter, with volume driven revenue up +6.2% after a challenging first quarter. Our International business continues to go from strength to strength and saw revenue growth of +23% in the first half of the year.”

He adds: “Our Strategic partnerships with Nissin and Mondelez International are working very well, together delivering over 40% of our revenue growth in the second quarter. We completed the signing of the new Mondelez International Global Strategic Partnership in the first half of the year and through our partnership with Nissin, Batchelors is now the fastest growing major brand in our portfolio following the launch this year of convenient pot format products such as Super Noodle Pots.”

He concludes: “Overall, we continue to expect the business to make progress in the second half of the year and our expectations for the full year remain unchanged.”

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