6th Nov 2013 10:35
LONDON (Alliance News) - Food manufacturer Premier Foods Group PLC Wednesday confirmed it is in talks with a number of private equity groups about selling a stake in its struggling bread business, following a report by Sky News on Tuesday.
The owner of a range of food products, including Hovis Bread and Bisto gravy, said that it has appointed merger and acquisition advisory firm Ondra Partners to assist in developing investment options for the bread business, including the possibility of spinning it out as a separate company owned by Premier and another investor.
Premier said that there is no certainty that a sale will take place in the future, and said it will provide updates as appropriate.
In its third-quarter trading update last week, Premier said bread sales were down 1.5% on last year. It said it has implemented a restructuring programme in the bread division this year, including the closure of three bakeries, two mills and a reorganised logistics network. Restructuring costs associated with this programme are expected to be approximately GBP28 million in the full-year, the company said.
Premier's bread division recorded operating profit of GBP14.3 million in the half year to June 30, down 24% from GBP18.7 million a year before, as sales declined to GBP240.6 million pounds from GBP242.3 million.
Shares in the company were trading 3.6% higher Wednesday morning, at 144.99 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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