Premier Foods reports strong growth in festive sales

Premier Foods has reported its best-ever Christmas performance, with good sales across its grocery brands.

In a trading update for its third quarter, the food manufacturer said that group sales were up 14.4% in the 13 weeks to 30 December 2023 and its total market share increased by 121 basis points compared with the same period a year ago.

The quarter saw strong sales of Bisto, Oxo and Paxo products, as well as significantly higher sales of Cadbury cake. The company also sold nearly 190 million mince pies during the festive season — 4 million more than last year.

Sales in new categories more than doubled, and its international arm also performed well, especially in Ireland.

In the United States, Mr Kipling cake is now available in nearly 2,000 stores. Further recent additions in Canada will take the combined number of stockists across North America to almost 3,000 stores.

Price discounting contributed to Premier Foods’ sales growth in the period and further price cuts are planned in the current quarter.

“The lower promotional price points we introduced in the third quarter have positively impacted performance while also helping consumer budgets go further,” said chief executive Alex Whitehouse. “These lower prices will be extended to additional products such as Loyd Grossman cooking sauces and Mr Kipling Bakewell slices in quarter four.”

Premier Foods said that it continues to “trade strongly” in the fourth quarter and is “well on track to deliver against its previously raised profit expectations” for the full year.

Other brands in the Premier Foods stable include Batchelor’s, Ambrosia, Sharwood’s, Homepride and The Spice Tailor.

Premier Foods expects full-year profit at ‘top end’ of market expectations

Premier Foods has issued a positive profit outlook and said it has no plans to raise prices for the rest of 2023.

In a trading update for the first quarter, the food maker reported a 21.1% increase in group sales as well as market share gains.

Grocery sales were up 26.7% compared to last year, with all major brands “well ahead” in the quarter. In its confectionery business, non-branded sales grew by 86.2% as consumers looked for cheaper items amid the cost of living crisis.

Chief executive Alex Whitehouse said: “We believe the recent period of significant input cost inflation is now past its peak and have no further price increases planned for the rest of 2023.”

For the full year, Premier Foods expects to report trading profit at the “top end” of market expectations of £162.0m to £165.4m.

Premier Foods’ brands include Ambrosia, Batchelors, Bisto, Loyd Grossman, Mr. Kipling, Oxo and Sharwood’s.

Premier Foods reports strong festive sales

UK-based food manufacturer Premier Foods plc has reported a strong performance in the final three months of 2022 and said it is on course to hit targets for the full year.

Group sales for the company’s third quarter were up 12% year-on-year, with branded sales growing 8.8%.

Its grocery sector showed the fastest growth with sales up 17.4%. Pricing contributed a significant proportion of revenue growth in the quarter while demand was said to be “particularly buoyant” in the run-up to the key festive period.

Premier Foods also announced, however, that it is planning to close its loss-making Knighton manufacturing site by the middle of 2023, affecting 300 employees and costing around £10m.

Looking ahead, the company said that higher costs for the business are being offset through a combination of cost savings and price increases.

“With strong momentum entering the fourth quarter of the year, and more brand investment and new product launches to come, the Group remains well on track to deliver on expectations for this financial year,” Premier Foods concluded.

Premier Foods’ brands include Batchelor’s, Mr Kipling, Ambrosia, OXO, Bisto, Sharwood’s and Homepride.

Premier Foods sells table sauce unit to Japan’s Mizkan for £93m

British food producer Premier Foods Plc (LON:PFD) said on Tuesday it had reached a conditional agreement to offload its sweet pickles and table sauces operations to Japan’s Mizkan Group Corp for GBP92.5m (USD148.6m/EUR114.7m) in cash, which will be deployed for debt reduction.

Upon finalisation of the transaction, which is seen to occur early next year, following green light from the vendor’s stockholders and approval from its back syndicate, Premier Foods will have raised GBP370m in proceeds from offloads since March 2012. This amount is well over the target of GBP330m by June 2014, agreed upon with its lenders under its new financing arrangements, the British company said.

The business to be shed includes the manufacturing, distribution, sales, marketing and licensing of the Branston brand, a private label operation and the Bury St Edmunds manufacturing site in Suffolk. The product range includes sweet pickle, ketchup, relish, salad cream and mayonnaise.

With the disposal, Premier Foods will be able to concentrate efforts on its grocery business and on building value in the bread line, its CEO, Michael Clarke, said. Upon close of the transaction, the branded sales mix of the grocery operations will represent some 90%.

The Branston brand is a strategic addition to Mizkan’s global range and enhances the group’s position to expand in the UK, Mizkan’s CEO, Kazuhide Matazaemon Nakano VIII, added.

Associated British Foods acquires Premier Food’s ethnic flour business

UK-based food, ingredients and retail group Associated British Foods plc (LON:ABF) on Friday said it was buying the Elephant Atta ethnic flour business of Premier Foods Plc (LON:PFD) for a cash price of GBP34m (USD53m/EUR43m).

This acquisition of a top British ethnic flour brand will add to ABF unit Westmill Foods’ leading ethnic brands such as Tolly Boy rice, Rajah spices, Lucky Boat noodles and Patak’s pastes and sauces, Associated British Foods’ CEO George Weston said in a comment.

Premier Foods, which will use the cash from the sale to reduce debt, said the disposal is part of its strategy to exit selected, non-core operations and cut costs, while growing its power brands, CEO Michael Clarke said in a separate statement.

The business being sold includes the Elephant Atta, Elephant Chakki Gold and Fassal brands, mainly produced and packed at Premier Foods’ mill in Southampton.

Until regulatory clearance for the ownership transfer is obtained, Premier Foods will continue to mill and package the flour brand, the buyer said.

The Elephant Atta business generated revenues of GBP17.8m and EBITDA of GBP6.4m in the year to 31 December 2011, at which date its gross assets stood at GBP3m.

The business was founded in 1962. The Elephant Atta brand sells in a variety of medium, self-raising, white, brown and wholemeal flours used to make chapatti and other unleavened flat bread.

Westmill Foods provides ethnic food products to ethnic retailers and wholesalers in the UK.