Table of Contents
- Premier Foods revealed its third quarter turnover rose 3.1% to £360.1m
- Kipling’s Cakes in Australia Helped Drive a 29% Rise in Premier’s Overseas Sales
Premier Foods expects profits to hit the top end of forecasts after the maker of Mr Kipling enjoyed bumper confectionery sales over Christmas.
The food maker’s turnover rose 3.1 per cent to £360.1m in the 13 weeks ending December 28, while sales of branded sweets rose 8.9 per cent.
Kipling’s products were especially popular, with sales of its signature mince pies and brownie bites more than doubling as customers switched to premium items.
Kipling cakes proved popular in Australia, buoyed by the launch of new ranges such as flavored Bakewell cakes, which helped drive a 29 per cent increase in Premier sales overseas.
Other top-selling brands included Indian condiment maker The Spice Tailor, which benefited from Diwali celebrations in Canada and the launch of East Asian sauce kits.
The new product ranges also boosted demand for Loyd Grossman cooking sauces and Nissin noodles over the festive period.
Expectations: Premier Foods now expects profits to hit the upper end of forecasts
Premier’s branded sales in its grocery division rose 3.3 per cent to £232.4 million, offsetting a 9.3 per cent drop in non-branded turnover from the segment.
Alex Whitehouse, CEO of Premier, said: “We are pleased to report another very good quarter of volume-driven brand revenue growth, accompanied by further market share gains, as our brand growth model continues to work. good for us.”
Premier Foods forecasts its trading profits will be at the “upper end” of its range of £180.1m to £186.4m.
Premier Foods Stock rose 5.7 per cent to 189.2 pence on Tuesday morning, taking its gains over the past year to around 34 per cent.
The easing of cost of living pressures has provided a significant boost to the FTSE 250 company as consumers feel more confident in switching their purchases from own-brand products to brands.
At the same time, Premier has made several acquisitions, including The Spice Tailor and protein cereal brand FUEL10K.
Based in Dingwall, FUEL10K specializes in breakfast foods such as porridge, granola and dairy drinks; Their products are found in major supermarkets such as Tesco, Asda and Sainsbury’s.
Premier has also reduced its debts, from £1.8bn in 2008 to £221.2m in September, partly by selling some companies and overhauling its pension plans.
Dan Lane, senior analyst at Robinhood, said: “Debt has historically been a concern, but Premier has apparently turned a corner and is addressing it well.”
However, Lane said improving inflation and interest rates may lead an interested party “to look to snap up the company before any further positivity makes the stock even more expensive.”
“Stocks currently trading at around 14 times earnings are not likely to stand in the way of a motivated buyer who thinks they could really accelerate U.S. growth in particular.”
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