Premier Foods, the owner of brands such as Mr Kipling and Bisto, has made a good start to its new financial year and ruled out further price increases during the rest of 2023 after seeing input cost inflation ease.
Over the thirteen weeks ended 1 July, the group’s total sales jumped 21.1%, driven by its Grocery division which increased by 26.7%.
Buoyed by price rises to offset higher costs over the last year, branded grocery sales climbed 25.1%, with all its major brands ahead in the quarter, translating into 94 basis points of market share growth.
Instore activation was said to have been strong, contributing to an “improving volume trend” towards the end of the period. Non-branded sales jumped 38.3%, reflecting pricing in retailer-branded product categories.
Premier Foods’ Sweet Treats division saw sales grow by 7.6%, with branded sales broadly flat and non-branded sales up 86.2%. Mr Kipling revenue increased by 3.6%, benefitting from new product launches and activity commemorating the King’s Coronation. The high growth in non-branded sales was attributed to contract gains in pies and tarts and pricing benefits on existing product lines.
Meanwhile, the group’s overseas sales rose 14% as it continued to roll out its brands in the US, Australia and Europe.
Looking ahead, Premier Foods stated that revenue growth in its Grocery business was expected to moderate in forthcoming quarters as year-on-year effects of higher prices reduce, while the trajectory for Sweet Treats is expected to build through the second half of the year.
Following the robust performance, the group now expects its trading profits for the year to be at the top end of market forecasts – currently £162m to £165.4m
CEO Alex Whitehouse concluded: “We believe the recent period of significant input cost inflation is now past its peak and have no further price increases planned for the rest of 2023. With this positive momentum, and strong plans behind our leading brands for the remainder of the year, we now expect FY23/24 trading profit to be at the top end of market expectations.”
