Premier Foods Reports Revenue Growth

Investing.com — Premier Foods (LON:PFD) announced a 4.6% rise in headline revenue for the first half of its financial year, reaching £498.7 million for the six months ending September 28.

Branded products were the primary growth drivers, with branded revenue increasing 6.8% to £444.7 million. Key brands contributing to this growth included Mr Kipling, Sharwood’s, and Ambrosia.

Grocery brands alone saw a 7% increase, and Sweet Treats like Mr Kipling cakes rose by 6.1%. Conversely, non-branded revenue fell 10.4% as consumers preferred trusted brands, leading the company to exit several low-margin contracts.

Profitability also improved, with headline trading profit climbing 5.5% to £70.2 million, while adjusted profit before tax was up 8.9% to £61.0 million.

Analysts at RBC Capital Markets noted, “Profits were in line with our expectations with EPS ahead, the main reason being a lower than forecast tax charge… we do not anticipate material change in our forecasts.”

However, statutory profit after tax decreased 7.5% to £39.5 million, influenced by reduced pension credits compared to the previous year. Basic earnings per share dropped to 4.6 pence, down from 5.0 pence.

Internationally, Premier Foods experienced robust growth, with sales surging 31% as brands like Mr Kipling and Sharwood’s thrived in Australia, New Zealand, and North America. Sharwood’s introduced family-sized jars and launched The Spice Tailor products in new markets, boosting international revenue.

The company's total net debt improved significantly, falling to £221.3 million, a £51.8 million reduction from the previous year, thanks to strong cash flow management and strategic debt reduction efforts.

New product launches, including Sharwood’s curry kits, Mr Kipling Loaf Cakes, and Ambrosia Deluxe (NYSE:DLX), responded to consumer demand for quality, indulgent offerings at affordable prices.

CEO Alex Whitehouse stated, “As inflation has begun to ease and shoppers are feeling more confident, we’ve seen consumers treat themselves more, helping sales of both Mr Kipling Signature Bites and Ambrosia Deluxe more than double in the first half of the year.”

Premier Foods remains optimistic for the second half of the fiscal year, anticipating continued growth driven by seasonal promotions and holiday product launches, including festive Mr Kipling mince pies. The company expects sustained momentum in branded products through capital investments in efficiency and supply chain enhancements to support future growth plans.