Premier Foods profits set to jump as firm benefits from home cooking
Sales at Premier Foods were up nine per cent in the final quarter of 2020, and 12.5 per cent year-on-year, shrugging off pandemic worries.
The firm, which has its Knighton Foods subsidiary at Adbaston near Stafford, saw branded sales up more than 12 per cent this quarter, and 16 per cent year-on-year, driven in part by lockdown restrictions on eating out.
Grocery brands were a significant contributor to the performance, as sales increased by nearly 15 per cent in the quarter and almost 21 per cent in the year to date.
Premier Foods owns brands such as Mr Kipling, Bisto and Ambrosia. Mr Kipling is on track for a record year, with UK sales up seven per cent in the third quarter. The brand has benefitted from the launch of new product ranges and an extended period of marketing investment.
Ambrosia rice puddings and custard also pushed up sales, while Bisto reported double-digit sales growth.
CEO Alex Whitehouse said the third quarter of the year proved to be “another period of exceptional growth”, with branded and non-branded sales up in the 13 weeks ending 26 December.
“Looking to the remainder of the year, out of home eating is likely to remain heavily restricted and we therefore expect to see continued high levels of consumer demand for our products.
“With more brand investment to come, we now expect trading profit to be in the range of £145 million to £150 million this year," he added.
International sales during the quarter rose 43 per cent, boosted in part by stockpiling ahead of the end of the transition period and the UK’s departure from the European Union on December 31.
The FTSE 250 firm also signed an agreement with Weston Foods during the quarter to sell Mr Kipling in the US, with the first shipments due to the start in the first quarter of the 2021/22 financial year.
"Premier “is clearly enjoying a good war,” said Martin Deboo, analyst at Jefferies. “However, this is more than just a bubble economy, with the group gaining both volume and value share during the quarter, according to independent retail auditors IRI.”
