Premier Foods is now expecting its annual trading profit to come in at the top end of market expectations after the coronavirus outbreak led to a surge in sales of its products during March.
The firm, which owns brands such as Mr Kipling, Bisto and Ambrosia, revealed that UK sales had increased around 7.3% in the fourth quarter and 15.1% last month as consumers stockpiled food at the start of the crisis.
Total group sales in March jumped 10.5%, driving fourth-quarter sales up 3.6%.
Premier Foods stated that volumes had now started to reduce from the “exceptional levels” seen last month, but it still expects trading to outperform previous years as more meals are eaten at home during the lockdown.
The company said its manufacturing and distribution operations have been working at maximum capacity but had coped well with the elevated level of demand.
Shares in the Premier Foods soared by nearly 20% after it revealed the robust figures and outlined that it had agreed on a segregated merger of its three pensions schemes that will save the company £4m annually and provide “greater funding certainty” for its members.
Chairman Colin Day said the merger of the schemes “represents a ground-breaking agreement which is set to unlock benefits and value for all stakeholders in the company.”
Analysts at Peel Hunt commented: “This announcement results in higher forecasts, lower cash injections and makes Premier considerably more investable.”
NAM Implications:
- Key advantages for Premier Foods are its heritage brands (customer confidence in same), home cooking, and super-savvy consumerism.
- Watch this space!
