- Premier Foods reported that its adjusted pre-tax profits rose 15.1% to £157.9 million
- The company’s overall turnover increased by the same percentage to £1.12bn.
Premier Foods’ profits beat expectations last year thanks to price cuts and a rise in customers buying porridge, noodles and ice cream.
The food maker reported that its adjusted pre-tax profits rose 15.1 percent to £157.9 million in the year ended March 30, compared with analysts’ forecasts of around £ £153 million.
Overall turnover rose by the same percentage to £1.12bn, largely due to growing demand for “new categories” and branded products in its food division.
Tasty brand: Premier’s revenue from Ambrosia surpassed £100m for the first time as sales of porridge pots more than doubled.
The increase in trade also follows price reductions on multiple items as many consumers opt for cheaper alternatives amid the cost of living crisis.
Premier lowered prices on ranges such as Loyd Grossman cooking sauces and Batchelors Super Noodles in the second half of the period, although it continued to raise prices on its own brand products.
Meanwhile, Ambrosia’s revenues surpassed £100m for the first time as sales of porridge pots more than doubled, supported by the launch of a new apple and blueberry variant.
Ice cream purchases also more than halved, thanks to the expansion of its Angel Delight and Mr Kipling ranges to more retailers.
And Nissin noodles enjoyed another bumper year, with the Japanese brand’s sales rising by more than 30 per cent to almost £50m.
Following the result, Premier bosses proposed a 20 per cent increase in the company’s annual dividend to 1.73 pence per share.
Alex Whitehouse, chief executive of Premier Foods, said it was “another really strong year for the business, with considerable progress across all our key financial metrics”.
The FTSE 250 group reduced its net debt by £38.7m to £235.6m, equivalent to 1.2 times its adjusted profits before the unpleasantness, a record low.
Premier has struggled for some years with huge pension obligations, but its pension shortfall payments have been suspended since April.
The move will increase the company’s cash flow by £33m this financial year, providing more opportunities to increase investment and dividends and spend money on mergers and acquisitions.
The group’s recent acquisitions include Asian food company The Spice Tailor and Scottish breakfast brand Fuel10K, which makes oatmeal, muffins and granola products.
Premier Foods Stock They were down 2.8 per cent to 164p early on Thursday afternoon, but have nonetheless expanded by about a quarter in the past 12 months.
