9th Jan 2006 07:00
Premier Foods plc09 January 2006 Trading update for the year to 31 December 2005 Healthy Christmas trading delivers operating profits and margins in line withour expectations. Business well-positioned for 2006. Premier, one of the leading suppliers of grocery products in the UK, isproviding the following update for the year ended 31 December 2005, ahead of itspreliminary results announcement on 7 March 2006. We expect total reported grocery sales for continuing operations for the year tobe up by approximately 15% and like-for-like grocery sales growth of around 2%.We expect like-for-like sales growth after adjusting for the effect of the firein 2004 at our Bury St Edmunds factory of around 1%. EBITA1 and margins areanticipated to be within the range of our expectations. Robert Schofield, Premier Foods plc CEO, said: "2005 has been another active year for Premier. The acquisitions and disposalswe have made during the year have strengthened our portfolio and taken the shareof our grocery sales from branded products to over 60%. They have also movedour portfolio into higher growth categories and we are well placed to takeadvantage of the increasing trend for "healthy eating". "As indicated at the time of the interims, we were looking to offset theexceptional level of inflation in energy costs through price rises and we arepleased to have achieved a satisfactory level of cost recovery. The impact onsales of exceptionally mild autumn weather has been compensated for by healthyChristmas trading." Following the sale of our tea business in October 2005, we have redefined ourproduct groups into "Convenience Foods, Pickles, Sauces and Meat Free" and "Spreads, Desserts and Beverages". Convenience Foods, Pickles, Sauces and Meat Free Sales for this product group are anticipated to be significantly ahead of 2004due to the acquisition of Quorn and Cauldron Foods. Like-for-like sales areanticipated to be in line with 2004's sales of £347.5m, after adjusting for thedisposal of the Jonker Fris business. The second half has seen continued stronggrowth of our Branston and Loyd Grossman brands but this has been offset bylower sales of our smaller brands and own label convenience foods. We launched a range of Branston Baked Beans and Pasta during the fourth quarterof 2005 having identified that there was a desire from the consumer for improvedquality in these categories. The launch has gone well and has receivedsubstantial marketing support during the fourth quarter of the year. We are very excited about the opportunities for Quorn and Cauldron, particularlybecause of the increasing consumer trend towards healthier eating. Themeat-alternative category continues to grow strongly and both Quorn and Cauldroncontinue to grow their market share. Spreads, Desserts & Beverages Sales for this product group (which excludes tea which is treated asdiscontinued) are anticipated to be significantly higher than the £246.9mrecorded in 2004 due to both strong organic growth and the acquisition of theBird's desserts business in February 2005. The organic growth is being drivenby new product development, growth of snacking formats and new own labelcontracts. The transfer of production of the Birds and Angel Delight brands acquired inFebruary to our Knighton factory was completed during the fourth quarter of2005. As we outlined at the time of our interim statement, we have incurredtransitional costs during the year associated with sourcing production fromKraft whilst installing the new lines. These costs ceased on the transfer ofproduction. Potatoes As we indicated at the time of our interim announcement, sales for this divisionare anticipated to be significantly lower than 2004's reported sales of £150.3mas a result of lower market prices and volumes. During 2005 we have realignedthe business with its customers through the acquisition of the Gedney's freshproduce business and adjusted the business' cost base through the closure offour of its six packing facilities. This will ensure that we will enter 2006 asa competitive supplier of a broad range of fresh produce from a stabilised base. We will record the trading results of the tea and Jonker Fris businesses, whichwere sold during the second half of the year, along with a net exceptional gainon the disposals of approximately £40m under Discontinued Operations. Preliminary results for the year ended 31 December 2005 will be announced on 7March 2006. We will host a presentation to analysts at 9am at Merrill LynchFinancial Centre, 2 King Edward Street, London, EC1A 1HQ. Enquiries:Paul Thomas, Finance DirectorRobert Lawson, Director of Mergers & Acquisitions and Investor RelationsGwyn Tyley, Investor Relations ManagerPremier Foods plc Tel: 01727 815 850 Michael BerkeleySara BatchelorAnthony KennawayCitigate 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 Quorn and Cauldron Foods meat alternatives,Ambrosia custard and milk puddings, Bird's and Angel Delight desserts, Branstonpickles, baked beans and pasta, Hartley's preserves and desserts, Gale's honeyand lemon curd, Crosse & Blackwell convenience foods, Sun-Pat peanut butter,Sarsons vinegar, Haywards pickles, Smash instant mashed potato, Marvel powderedmilk creamer and Waistline salad dressings, soups and cooking sauces. Inaddition, the Company produces Cadbury cocoa-based beverages, HP conveniencefoods and Loyd Grossman cooking sauces and soups under agreement or licence.Premier also produces a range of retailer brand products, principally for themajor multiple retailers. Premier's current market capitalisation is £732m million (at market close on 6January 2005). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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