10th Nov 2015 08:28
LONDON (Alliance News) - Food producer Premier Foods PLC on Tuesday said its pretax loss narrowed in the first half and said it saw growth in sales in the second quarter which it expects to continue into the third.
Premier Foods, which makes brands such as Bisto gravy and Mr Kipling cakes, said its pretax profit for the half to October 3 was GBP5.1 million, a substantial narrowing on the GBP54.7 million loss it suffered a year earlier, thanks to much lower administrative costs and one-off impairments not repeating. Profit after tax also increased to GBP21.7 million from GBP5.6 million, as Premier benefited from a GBP26.8 million tax credit.
Revenue for the group edged down to GBP341.2 million from GBP343.9 million, but sales increased in the second quarter both for branded and non-branded products as investments the group made in its brand portfolio flowed through, it said.
Premier Foods expects further branded sales growth in the third quarter and said that while the grocery market conditions remain challenging, with discounters changing the dynamics of the industry, it remains on track to meet its profit expectations for the full year, despite planning a significantly higher marketing spend in the second half.
"We are pleased to see group branded sales growth in both the first half and second quarter of this financial year, as well as trading profit progression. This reflects the clear benefits from our continued commitment to brand investment and innovation. It is also encouraging to see strong sales growth in our International business following the investment we've made in additional resources," said Gavin Darby, Premier Foods' chief executive.
Premier Foods shares were up 15% to 41.16 pence early Tuesday, the best performer in the FTSE All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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