Premier Foods continued its resurgence during the final months of 2020 as consumers turned to its raft of well-known brands in the run-up to Christmas.
The company, whose previous lacklustre performance forced it into a battle with activist investors, revealed that total sales over its third quarter to 26 December rose 9% to £285.8m.
Sales of its Grocery brands unit jumped 14.6% to £176.5m as more meals were eaten at home by consumers. The Sharwood’s cooking sauce range was a star performer with sales surging up 40%, aided by new product launches. Premier Foods’ Bisto and Batchelors brands saw “healthy double-digit” sales growth, supported by increased investment in TV advertising. Ambrosia also delivered increased sales in the quarter, again benefitting from TV advertising.
The group’s branded Sweet Treats unit saw sales grow 5% to £55m with the Mr. Kipling brand said to be on track for another record year after sales climbed 7% in the quarter.
Meanwhile, Premier Foods’ non-branded Grocery sales rose by only 2.4% to £27.7m after increased demand for own label retailer products was partially offset by a decline in sales at its Charnwood Foods business due to lockdown restrictions. Sweet Treats non-branded sales fell 7.5% to £26.6m, with the group blaming the exit of a low margin seasonal contract.
Having already lifted its forecast twice since the start of its financial year in March, the company said today that it now expects annual trading profit to be between £145m and £150m, compared with £132.6m last year.
Premier stated that it will continue to increase its investment in brand advertising and has further new product development planned for the fourth quarter.
“Looking to the remainder of the year, out-of-home eating is likely to remain heavily restricted and we therefore expect to see continued high levels of consumer demand for our products,” said Chief Executive Officer Alex Whitehouse.
Meanwhile, Premier Foods revealed that it had signed an agreement with Weston Foods to sell Mr Kipling cakes in the US, with the first shipments expected to begin in the first quarter of its new financial year.
The group reported a jump of 43% in its international business sales during the quarter, partly helped by purchases of its products ahead of the UK’s exit from the EU. Premier Foods stated that it does not expect any material impact from tariff changes and that it had not experienced any major disruption to its supply chain.
