Premier Foods has made a relatively good start to its new financial year, as some of its leading food brands benefitted from recent advertising campaigns and a cooler summer compared to 2018.
In the 13 weeks ended 29 June, total group sales increased 1.1%, with branded sales up 2.9%. In the UK, total sales grew 2.6%, although international sales fell 18% as sales in Ireland slowed due to the unwinding of Brexit related stock in Irish customers’ supply chains.
Branded UK sales climbed 4.9% with both its Grocery and Sweet Treats units said to have delivered market share gains. Its brands such Bisto, Paxo and Ambrosia saw good growth, helped by softer comparisons with the same period last year which experienced exceptionally warm weather.
The company’s Mr Kipling brand saw sales climb 10%, benefitting from a relaunch during 2018 and further TV advertising in the latest quarter. Cadbury cake sales grew because of the later timing of Easter compared to last year and improved seasonal ranges.
Alastair Murray, acting Chief Executive, commented: “Many of our largest brands have built on strong category positions and grown market share, and we achieved branded growth in the quarter of nearly 3%. These figures provide evidence that the company’s strategy is delivering results. Our expectations for the full year remain unchanged.”
The company, which stuck to its full-year guidance, stated that it expects to see better performance in the second half of the year.
After former boss Gavin Darby stepped down at the start of the year, the firm launched a strategic review in February aimed at increasing shareholder value following months of fractious relations with two rebel investors – Oasis Management and Paulson & Co – due to the group’s weak performance.
Recent reports have suggested that Premier Foods could be sold or broken up after separate moves to sell its Ambrosia and Batchelor brands failed to come to fruition.
The company gave no update today on its plans, just saying that the review remains ongoing and that the outcome of which will be communicated in due course.
