FDBusiness.com

Premier Foods has reported a 1.3% increase in group revenue to £358.0 million and a 6.2% rise in trading profit to £51.0 million for the 26 weeks ended 29 September 2018. The group’s largest brand, Mr Kipling, was key to this growth following an excellent consumer response to its relaunch in the UK with revenues up 13%. Batchelors, Premier Foods’ third largest brand, delivered revenue growth of 6.8% as consumers continue to enjoy its new convenient pots range. Group branded revenue grew by 0.5% to £296.9 million while non-branded revenue also increased, up 5.5% to £61.1 million during the first half.

Gavin Darby, chief executive of Premier Foods, comments: “While we are committed to our strategy of improving operating performance and targeting a net debt to EBITDA ratio below 3.0x by March 2020, we are also working in parallel to identify other strategic opportunities to accelerate the company’s turnaround. The Board has determined that it should focus resources on areas of the business which have the best potential for growth through accelerated investment in consumer marketing and high return capital projects. Accordingly, we are pursuing options to fund these plans as well as delivering a meaningful reduction in net debt, through discussions with third parties regarding the potential disposal of our Ambrosia brand. Although there is no certainty that any transaction will complete, we will update shareholders in due course.”

He adds: “We have a strong innovation plan in place for the second half of the year, and profit expectations for the full year remain unchanged.”

Having announced a new strategic initiative for the business, Gavin Darby has decided to step down as chief executive on 31st January 2019, which will mark the sixth anniversary of his joining Premier Foods. The Board has commenced its search for his successor.