Premier Foods said today that its year-end profits will be at the top end of expectations despite reporting a significant fall in sales during its first-quarter period.
During the thirteen weeks ended 3 July, the owner of brands such as Sharwood’s and Mr Kipling, saw its total group sales fall 13.2%. However, this was against tough comparatives with last year when consumers were buying more food and drink in supermarkets during the height of the pandemic.
However, compared to the pre-pandemic period two years ago, total sales rose 6.3%. This was at the top end of the group’s 5-6% expected range and was driven by a 9.3% rise in branded sales. Non-branded sales slipped 10.9%.
Premier stated that its two-year branded performance “demonstrates further evidence that the group’s brand-building model is delivering consistent growth”.
The company also highlighted that online sales were similar to the high levels seen last year and nearly double that of two years ago.
In its Grocery division, year-on-year branded sales plummeted 19.6%. However, the two-year comparative figure was up 12.0% with “double-digit” percentage growth for its Ambrosia, Bisto, Oxo, Sharwood’s and Paxo brands.
Premier highlighted the example of its Sharwood’s range which has delivered two-year sales growth of 25%. This has been driven by TV advertising and the launch of new Vegan cooking sauces, whilst benefitting from consumers discovering the brand during lockdown.
The company also noted its progress with healthier ranges such as low-fat sauces, as consumers “adopted good healthier eating habits during the pandemic”.
In its Sweet Treats unit, branded sales increased by 3.2% versus a year ago and 3.7% against 2019 figures. Its Mr Kipling range continued to perform well with sales up 7.5% in the quarter, driven by advertising and new product launches.
Meanwhile, Premier’s international business grew sales by 2% (+17% on a two-year basis) as it continued to benefit from a revised strategy.
The company stated that its overall strong sales performance coupled with a material reduction in interest costs from the fixed-rate bonds issued during the quarter, meant its adjusted pre-tax profit for the full year is now expected to be at the top end of its expectations.
CEO Alex Whitehouse commented: “We have made a very encouraging start to the year, with Quarter 1 sales at the top end of our expectations, as our brands again benefited from the introduction of new products and continued marketing investment.”
