Premier Foods Returns To Growth In The First Half Due To Partnerships

Wednesday, 15 Nov, 2017

Branded revenue was in line with a year ago, Premier Foods said, at GBP295.4 million, whilst non-branded revenue increased by 10% to GBP57.9 million.

Shares were up 6.1 per cent in early trading.

Revenues also picked up by 1.5 per cent to £353.3m, driven by a strong second quarter and a 23 per cent jump in sales from its worldwide operation.

Premier Foods PLC said Wednesday said it had returned to growth in the first half of its current financial year thanks to strategic partnerships with Japanese instant noodle maker Nissin and American confectionery company Mondelez International.

The food manufacturer's revenues climbed 1.5pc to £353.5m in the 26 weeks to September 30, while it posted a slender profit of £300,000, compared to a £55.6m loss past year.

Global growth came from strong demand for Mr Kipling and Cadbury in Australia, with the group eyeing a boost from a further expansion of Asian food brand Sharwood's across the United States.

Bisto, the group's second largest brand, performed well, delivering revenue growth, while Angel Delight, one of the group's smaller brands grew by 30% in the period, benefitting from the launch of convenient ready to eat pots. The company swung to a net profit of GBP300,000 from a net loss of GBP55.6 million past year.

Darby also said Premier Foods' partnerships with Nissin and Mondelez International are "working very well".

"The cost efficiency programme we launched earlier this year is on track to deliver the expected benefits", said Darby.

Over 40 per cent of the strong growth in the second quarter was a result of Premiers strategic partnerships with Nissin and Mondelez International. Premier's second quarter sales were up 6.2% compared with the previous quarter.

It added that cost inflation, largely driven by the Brexit-hit pound, would continue to rise in the second half of the year, but at a lower rate.

"Our worldwide business continues to go from strength to strength and saw revenue growth of +23 per cent in the first half of the year".