28th Dec 2006 07:01
Premier Foods plc28 December 2006 28 December 2006 Correction: The Trading Update for the year ending 31 December 2006 issued 22December 2006, RNS number 5246O, carried a typographical error. The 2005 salesfigure for Spreads, Desserts & Beverages should have read £286.7m not £256.7m.The full text of the Trading Update, as corrected, follows. NOT FOR DISTRIBUTION OR TRANSMISSION, DIRECTLY OR INDIRECTLY, IN OR INTO THEUNITED STATES, AUSTRALIA, CANADA, JAPAN, OR ANY OTHER JURISDICTION WHERE TO DOSO WOULD CONSTITUTE A VIOLATION OF LOCAL SECURITIES LAW. 22 December 2006 PREMIER FOODS PLC ("PREMIER") TRADING UPDATE FOR THE YEAR ENDING 31 DECEMBER 2006 Brand development and acquisition programme progressing well. Premier, one of the leading suppliers of grocery products in the UK, isproviding the following update for the year ending 31 December 2006. We expect total reported sales for continuing operations for the year to be upby 20% with like-for-like grocery sales growth in line with our targets. Robert Schofield, Premier Foods plc CEO, said: "2006 has been a year of transformation for Premier. The acquisition ofCampbell's in August enhanced our brand portfolio and we are on track tocomplete the integration of the business in the first quarter of 2007. We arelooking forward to completing the acquisition of RHM early next year and areexcited by all the opportunities that bringing these two great businessestogether will offer. "We are pleased by the progress of our Drive brands which have continued toperform well throughout the year and we expect that our overall like-for-likesales growth will be broadly in line with our targets. However, the warmerweather, which extended through to early December, has meant that Christmastrading has commenced later than expected and the out-turn for the year isdependent on trading in the final two weeks of the year. "As indicated at the time of the interims, we have continued to see costpressures over the second half of the year, which we do not expect to be fullyoffset until the early part of 2007. These pressures coupled with the effect onvolumes of the exceptional period of warm weather which has continued intoDecember means that we anticipate that trading for the year will be at the lowerend of our expectations while still delivering like-for-like trading and brandedsales growth." Convenience Foods, Pickles, Sauces and Meat Free Sales for this product group are anticipated to be significantly ahead of 2005due to the acquisition of Campbell's and a full year's sales from Quorn andCauldron Foods. Like-for-like sales are anticipated to be broadly in line with2005's sales of £347.1m. The second half has seen the continued strong growthof our Branston and Loyd Grossman brands but this has been offset by the effectof the unseasonably warm summer and autumn which impacted our smaller brandsand, particularly, own label convenience foods. As in the first half of theyear, cost pressures have disproportionately affected our Convenience Foodsbusiness. We are delighted by the continued progress of Quorn. Our Meat-Free business hasmaintained the strong growth rate seen through the first half of the year.Market share in both the chilled and frozen channels and household penetrationhave all continued to grow. The development of our new Methwold chilledfacility is progressing well with production scheduled to commence over the nextcouple of months. We are pleased by the performance of the Campbell's business. Sales for theperiod from acquisition to December 2006 are anticipated to be approximately£100m with margins in line with management's expectations at the time of theacquisition. Spreads, Desserts & Beverages Like-for-like growth in both sales and profits continues to be driven by strongperformances from Ambrosia snacking formats and Hartley's jam and jelly.Reported sales for this product group are anticipated to be lower than the£286.7m recorded in 2005 due to the replacement of the Cadbury beverages licencein May 2006 by the co-manufacturing arrangement. Fresh Produce Sales for this division are anticipated to be in line with 2005's reported salesof £106.3m. The business has been particularly affected by the hot summerweather, which had a significant impact on the potato harvest across Europe. Asa result, we anticipate that the profitability of the division for the secondhalf will be in line with that in the second half of 2005. Campbell's integration We are pleased by the progress we have made on integrating the Campbell'sbusiness into Premier which is proceeding according to plan. We have announcedthe closure of the Cambourne head office and the integration of administrativefunctions into our Long Sutton site. Accordingly, we expect to complete theintegration of the business control elements of Campbell's into Premier by theend of the first quarter of 2007. The manufacturing review to optimiseefficiency across our manufacturing network is ongoing and we expect to announcethe results of this shortly. We also commissioned an independent review of ourpre-acquisition synergy estimates and we are pleased that this review hasconfirmed the potential synergies at £28m per annum from 2009. Preliminary results for the year ending 31 December 2006 are scheduled to beannounced on 6 March 2007. We will host a presentation to analysts at 9am atABN AMRO, 250 Bishopsgate, London, EC2M 4AA. Enquiries: Paul Thomas, Finance Director Robert Lawson, Director of Mergers & Acquisitions and Investor Relations Gwyn Tyley, Investor Relations Manager Premier Foods plc Tel: 01727 815 850 Michael Berkeley Justin Griffiths Nicola Smith Citigate Dewe Rogerson Tel: 020 7638 9571 Notes to Editors Premier Foods plc is a leading UK manufacturer and marketer of grocery products. Premier manufactures and markets grocery products for the retail grocery andout of home channels in two principal product segments: • convenience foods, pickles, sauces and meat free; and • spreads, desserts and beverages. Premier also operates a potato packing and marketing business in the UnitedKingdom, supplying the retail grocery, out of home and food manufacturingchannels. Premier's branded products include Batchelor's soups, noodles, rice, pasta andvegetables, Quorn and Cauldron Foods meat alternatives, Ambrosia custard andmilk puddings, Oxo stocks and gravies, Bird's and Angel Delight desserts,Branston pickles, baked beans and pasta, Hartley's preserves and desserts,Homepride cooking sauces, Gale's honey and lemon curd, Crosse & Blackwellconvenience foods, Sun-Pat peanut butter, Sarsons vinegar, Fray Bentos meatpies, Haywards pickles, Smash instant mashed potato, Marvel powdered milkcreamer and Waistline salad dressings, soups and cooking sauces. In addition,the Company produces Loyd Grossman cooking sauces and soups under licence.Premier also produces a range of retailer brand products, principally for themajor multiple retailers. Premier's current market capitalisation is £1,570 million (at market close on 21December 2006). This announcement has been issued by, and is the sole responsibility of,Premier. N M Rothschild & Sons Limited, which is authorised and regulated by theFinancial Services Authority in the United Kingdom, is acting as financialadviser and sponsor to Premier and no one else in relation to the offer for RHMplc and will not be responsible to any person other than Premier for providingthe protections afforded to clients of N M Rothschild & Sons Limited, nor forproviding advice in relation to the matters described in this announcement. This announcement does not constitute an offer to sell or the solicitation of anoffer to buy new ordinary shares in Premier ("New Ordinary Shares"). The offerto acquire New Ordinary Shares in connection with the acquisition of RHM plc(the "Acquisition") will be made solely on the basis of information contained inthe Prospectus to be published by Premier in connection with the Acquisition. The information contained in this announcement is not for release, publicationor distribution to persons in the United States, Canada, Australia, Japan or anyother jurisdiction where to do so may constitute a violation of local securitieslaws. This announcement is not an offer of securities for sale into the UnitedStates. The New Ordinary Shares have not been, and will not be, registeredunder the United States Securities Act of 1933, as amended, and may not beoffered or sold, directly or indirectly, in the United States absentregistration or exemption from registration. The New Ordinary Shares have notbeen, and will not be, registered with any regulatory authority of any statewithin the United States. There will be no public offer of securities withinthe United States. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Premier Foods