FDBusiness.com

Premier Foods has reported group revenue of £847.1 million for the 52 weeks ended 28 March 2020 – up 2.8% on the prior year – with trading profit rising by £4.1 million to £132.6 million. Branded revenue increased by 3.9% to £705.6 million during the year while non-branded revenue declined by 2.5% to £141.5 million.

Premier Foods’ Grocery business grew branded revenues by 3.3% to £514.7 million, reflecting the benefits from the group’s innovation strategy and increased consumer marketing investment in the year. Branded revenues in the Sweet Treats business grew by 5.6% to £190.9 million, building on the excellent progress in the prior year. In the Grocery business, non-branded revenue declined by 1.8% in the year while Sweet Treats saw revenue fall by 3.9% to £44.6 million.

Premier Foods’ International business experienced a disappointing year as revenues fell by 19%.

Alex Whitehouse, chief executive of Premier Foods.

Alex Whitehouse, chief executive of Premier Foods, comments: “This has been a period of considerable progress for the company. We recently concluded our strategic review with a landmark pensions agreement which has the potential to significantly reduce future funding requirements for the group. This year we delivered trading profit at the top end of market expectations, reduced our net debt by £62 million, and in so doing lowered our net debt/EBITDA ratio to 2.7x, beating our previous 3.0x target. In the UK, our brands grew ahead of their categories, and our UK business has now delivered 11 consecutive quarters of revenue growth.”

He continues: “We have now grown group revenues, trading profit and adjusted earnings for each of the last three years, driven by our successful branded growth model of delivering insightful new product innovation together with emotionally engaging advertising and building strategic retailer partnerships. A good example of the growth model delivering results is our biggest brand Mr Kipling which two years after a major relaunch achieved its highest ever annual sales. Most of our other major brands also grew revenues in the year and sales of Nissin branded products nearly doubled. Additionally, our cost savings programme is now expected to deliver ahead of its original £5 million target over the next two years.”

All of the group’s manufacturing and distribution sites remained fully operational throughout COVID-19 period.

Looking ahead, Alex Whitehouse says: “As we look to the coming financial year, we anticipate making further progress, with increased consumer marketing investment planned. Revenues in the first quarter of FY20/21 are expected to be approximately 20% ahead of the same quarter a year ago reflecting continued strong demand for the group’s product ranges, particularly in our Grocery business. Consequently, we expect to exceed current expectations for FY20/21 revenue and trading profit despite incurring some additional operating costs in our supply chain. Our options for cash deployment and capital allocation will improve as a result of expected further net debt reduction in FY20/21.”