21st Jul 2016 07:39
LONDON (Alliance News) - Premier Foods PLC on Thursday reported growth in sales in the first quarter of its financial year, driven by strong growth in its non-branded products, and said it sees little financial exposure as a result of the UK's decision to leave the European Union.
Premier, which makes brands including Bisto gravy, Homepride cooking sauces and Mr Kipling cakes, said total sales in the 13 weeks ended July 2 grew by 1.9% year-on-year, although its non-branded products achieved the strongest performance with growth on 9.8% against the branded division's 0.8% growth.
Premier said this was its fourth consecutive quarter of sales growth and that its expectations for the full year remain unchanged.
Premier highlighted Bisto, Loyd Grossman and Ambrosia as three of the stronger brands in the Grocery business, while non-branded grocery sales were boosted by increased sales at Knighted Foods.
Knighted Foods makes instant dry power food products for retailers, food service customers and brands, and Premier bought the remaining 51% of the company which it did not previously own in May.
Within the Sweet Treats business, Cadbury and Mr Kipling stood out among the branded products, while non-branded sales were boosted by contract wins with major retailers and discounters, Premier said.
Premier added that work streams established for its co-operation agreement with Japan's Nissin Foods are "well underway, with collaboration on both sides building well commercially and operationally".
The agreement was signed in April, under which Nissin was allowed to appoint a non-executive director to Premier's board if it agreed to maintain an interest in Premier of at least 15%.
Nissin, which invented the instant noodle, bought a 17% stake in Premier from private equity group Warburg Pincus for 63.00 pence per share in March, and appointed Tsunao Kijma to the Premier board in May.
On Thursday, Premier said it expects to be able to deliver tangible initiatives from the work streams with Nissin in 2017.
"Our category strategy of investing behind our brands continues to deliver results, despite the wider deflationary grocery market in the UK. While the economic environment is more uncertain following the EU referendum outcome, our immediate financial exposure is expected to be limited. Given our strong brands and UK manufacturing cost base, we believe we remain well placed to make progress and our expectations for the full year remain unchanged," Chief Executive Gavin Darby said in a statement.
Shares in Premier were trading down 0.3% at 46.35 pence on Thursday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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