Shares in Premier Foods, the owner of brands such as Mr Kipling, Bisto, and Sharwoods, fell over 3% this morning after it reported disappointing half-year figures that reflected the consumer move away from home cooking that had boomed during the height of the pandemic.
The group’s revenue in the 26 weeks to 2 October slipped 6.5% to £394.1m against tough comparatives with surging demand for its products last year. However, Premier Foods noted that sales were still 7.5% ahead of the same pre-pandemic period two years ago.
Pre-tax profit plunged 39.2% to £30.7m after the sale of its stake in Hovis boosted prior-year numbers. On an adjusted basis, the fall was only 2.9%.
Despite the weaker figures, Premier Foods stressed that it was entering the second half of the year with good momentum and had plans to venture into more new categories.
Management flagged industry-wide challenges across the supply chain but said the group has robust plans in place to respond to them.
The company highlighted that it will benefit from lower interest costs from its earnings enhancing refinancing and is on track to deliver against its profit expectations for the full year.
“We have delivered a very good first-half performance, with revenue growth ahead of expectations; quarter two was particularly strong, with revenue growth of +8.5% vs two years ago,” said Chief Executive Alex Whitehouse.
“Our brands have performed especially well with growth versus two years ago of +11.4% and increased market share in both Grocery and Sweet Treats, illustrating the continued success of our branded growth model. I am particularly pleased with how well the business is successfully navigating the widely reported industry-wide challenges including logistics, labour shortages and input cost inflation to deliver such a strong set of results, which again underlines the robustness of our operating capabilities.
“As we look ahead to the second half of the year, we will be launching a range of insight-driven new products and supporting six of our key brands with advertising. We will expand our presence in adjacent new categories, building on the initial success of Cape Herb and Spice and Oxo Rubs & Marinades, as well as bringing to market premium Mr Kipling biscuits and a range of branded ice cream. We will also continue to develop our overseas businesses including the full roll-out of Mr Kipling in Canada and the test launch of Mr Kipling in the USA.”
