Premier Foods Plans to Increase Investment in Capital Projects and Consumer Marketing
Premier Foods has reported a 0.6% rise in revenue to £824.3 million for the 52 weeks ended 30 March 2019. Group trading profit at £128.5 million was up by 4.5% compared to the previous year and adjusted profit before tax rose by 12.1% to £88.0 million. However, due to GMP pensions recognition and impairment of intangible assets, Premier Foods reported a statutory loss before tax of £42.7 million. The UK food group reduced net debt by £26.5 million to £469.9 million during the year and the net debt/EBITDA ratio is now 3.2x.
Premier Foods’ Grocery business unit increased revenue by 1.3% in the year to £597.0 million, while revenue at the Sweet Treats business decreased by 1.2% to £227.3 million. The Grocery business recorded divisional contribution growth of £8.3 million to £138.3 million while Sweet Treats Divisional contribution was £2.2 million lower than the prior year at £23.6 million.
Alastair Murray, acting chief executive, comments: “Premier Foods has delivered consistent progress over the last two years, growing revenue, trading profit, adjusted earnings and reducing net debt. In the last year, Mr Kipling, our largest brand, grew +12% following its successful brand relaunch in the UK and in addition Ambrosia, Batchelors, Sharwood’s and Soba also displayed healthy growth. While we saw a decline in International revenue and experienced significant operational challenges with the final phase of our logistics transformation programme, our improved structural resilience still resulted in us growing trading profit by 4.5%.”
He continues: “This year we plan to increase investment in both capital projects and consumer marketing, with up to five of our biggest brands expected to benefit from TV advertising. We have plans to launch an exciting new brand, ‘Plantastic’, using plant-based ingredients, in response to current consumer trends and we expect our International business to return to double digit growth in the coming year. While the first half of FY19/20 is expected to be slower than last year, reflecting the timing of marketing investment, we expect to make further progress over the next twelve months thanks to our continuing pipeline of new product innovation and strong customer relationships. We remain focused on reducing our levels of net debt and expect to deliver a similar level of debt paydown in the coming year.”
The strategic review of Premier Foods’ operations remains ongoing
