Premier Foods plc Annual Report for the 52 weeks ended 2 April 2022
Enriching life
through food
Premier Foods plc Annual Report for the 52 weeks ended 2 April 2022
Our
strategy
→ Read more on
pages 14 and 15
Our
branded
growth model
→ Read more on
page 11
Our
purpose
→ Read more on page 10
We are a
purpose-led
organisation.
Our purpose reminds us what
we’re here to do – enrich life
through food.
Our purpose reminds us what we’re here to do –
enrich life through food.
It guides us, it motivates us, and it’s reflected in
every element of how we run our business today.
It means ensuring that the food we create helps
enable consumers to lead sustainable, healthier
lifestyles, manufactured in a way that respects
the world’s resources. It also means enriching life
for our colleagues by creating an inclusive culture,
where people are valued and respected, and can
reach their full potential.
Contents
Overview
Overview 02
Our ingredients 04
Our year in review 06
Strategic report
About Premier Foods 08
Our purpose 10
Our business model 11
Our values and culture 12
Our Strategy 14
Chairman’s statement 16
Chief Executive’s Review 18
Key performance indicators 20
The Enriching Life Plan 24
Climate-related disclosures 36
Operating and financial review 41
Risk management 51
Viability statement 58
Governance
Governance framework 60
Board of directors 62
Governance overview 64
Nomination Committee report 72
Audit Committee report 75
Directors’ Remuneration Report 79
Other statutory information 96
Statement of directors’ responsibilities 99
Financial statements
Independent auditor’s report to the
members of Premier Foods plc 101
Consolidated financial statements 111
Notes to the consolidated financial
statements 115
Company financial statements 157
Notes to the Company financial
statements 159
Additional disclosures 163
FOR OUR
CONSUMERS
Help our consumers to
lead healthier and more
sustainable lifestyles, by
creating foods that are rich
in nutrients.
FOR OUR
PLANET
Place environment at the
heart of our operations:
respecting natural
resources that make our
food more sustainable and
free of unnecessary or
problematic packaging.
FOR OUR
PEOPLE
Forge inclusive and
fulfilling career pathways
that contribute to the UK
economy and give back to
the communities where
we operate.
Continue
to grow the
UK core
Supply chain
investment
Expand UK
into new
categories
Build
International
businesses
with critical
mass
Inorganic
opportunities
LEADING
BRAND
POSITIONS
INSIGHT
DRIVEN NEW
PRODUCTS
SUSTAINED
MARKETING
INVESTMENT
RETAILER
PARTNERSHIPS
Enriching life through food
OVERVIEW
Premier Foods plc
www.premierfoods.co.uk
 01
We have
leading
brands...
Our brands are leaders in their categories
with high household penetration.
Flavourings & Seasonings
Quick Meals, Snacks & Soups
Ambient Desserts
Cooking Sauces & Accompaniments
Ambient Cakes
...that
innovate
to meet
consumers’
needs...
1
2
3
4
5
Health and
nutrition
Convenience
Snacking and
on-the-go
Indulgence
Packaging
sustainability
We launch new products based on
consumer trends, with a major focus on
health and nutrition.
 02
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
‘Devon knows’
‘Little Thief’
‘Adventures in
flavour. Since 1889’
‘Tasty’
‘Dad’s night in’
‘Sticking together’
...and strong
customer
partnerships.
Focused on driving mutual category growth and
delivering outstanding in-store execution.
...which are
supported
by engaging
marketing...
Significant investment in TV advertising and
digital activation behind six of our brands,
creating emotional connections
with consumers.
OVERVIEW
 03
Premier Foods plc
www.premierfoods.co.uk
42m
litres of fresh milk from West Country farmers for our Lifton dairy, where
we produce Ambrosia custard and rice pudding
2,700
tonnes of Bramley
apples from UK
orchards, for products
such as our Mr Kipling
fruit pies
47,000
tonnes of wheat from UK farmers, for
our Andover Mill, which is used to make
bagged flour and baking mixes, including
McDougalls
3,100
tonnes of mangoes
from India, for our
Sharwood’s mango
chutney
2,700
tonnes of rice from Italy and
Spain, for our Ambrosia rice
pudding and Batchelors savoury
rice
We aim to give our consumers great tasting products which are
rich in nutrients, to help them to lead healthier lifestyles. We
are also focusing on ensuring that each of our core ranges offer
a plant-based alternative, to support those consumers who are
looking to transition towards more plant-based diets. We source
our ingredients in a responsible manner to give consumers
confidence that the food they purchase is produced in an ethical
and sustainable way.
We source a wide range of healthy, natural ingredients for our
products, purchasing raw ingredients from a range of suppliers
in the UK and from markets around the world. Last year we
purchased over 315,000 tonnes of food ingredients, working
with around 220 suppliers, to develop long-term sustainable
partnerships which deliver mutual benefits.
Our ingredients
D
I
D
Y
O
U
K
N
O
W
?
Last year we purchased around:
Where ingredients can’t be grown locally, we source high quality ingredients from
Pictured above: Paul Corscaden, Head of Procurement, meeting with Oliver Mackle at the Mackle Apple orchard in Wisbech.
 04
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
Bramley
Apples
21,000
tonnes of tomatoes from
Spain and Portugal, for our
Sharwood’s, Loyd Grossman
and Homepride sauces
Mr Kipling Bramley apple pies
The Mackle family have been dedicated to
growing and processing Bramley apples for
over 50 years, working in partnership with
nature to promote healthy soil and insect
biodiversity, to ensure that only the most
delicious apples go into our Mr Kipling
apple pies.
Mackle Apple have been a key supplier to
the Group for over 20 years, and last year
we purchased over 650 tonnes of Bramley
apples. Grown at their orchards in Wisbech,
Cambridgeshire, spanning 350 acres, and
picked by hand before being processed at
their onsite factory.
We’ve spent 50 years fine-
tuning the art of apple growing,
to ensure that our Bramley
apples are as consistent as
they are delicious. We’re proud
to have worked with Premier
Foods for over 20 years,
supplying the highest quality
apples for one of the UK’s best
loved cake and pie brands,
and look forward to many
more fruitful years working in
partnership.”
Oliver Mackle
Mackle Apple
C
A
S
E
S
T
U
D
Y
our international partners, including:
OVERVIEW
Premier Foods plc
www.premierfoods.co.uk
 05
Our year in review
Over the year, we have made strong strategic progress with revenue ahead of expectations and strong
profit growth versus two years ago. Our branded growth model continues to deliver sales growth
through new product development (‘NPD’), sustained consumer marketing investment and excellent
in-store execution.
Due to the unique nature of the prior year when we saw exceptional patterns of demand for our products during the peak of the Covid-19
pandemic, we have managed and reviewed the performance of the business this year with reference to two years ago and the prior year.
The statutory comparative period is for the 53 weeks ended 3 April 2021. To aid comparability of results against equal time frames, headline
measures for prior year are provided on a 52 week comparable basis, all other years are stated on a comparable 52 week basis.
Revenue
1
(£m) Trading profit
1
(£m) Profit/(loss) before tax (£m)
FY21/2
2
FY20/21
FY19/20
FY18/19
FY17/18
£900.5m
£934.2m
£847.1m
£824.3m
£819.2m
Strategy in action
0 200 400 600 800 1000
FY21/22
FY20/21
FY19/20
FY18/19
FY17/18
£148.3m
£148.3m
£132.6m
£128.5m
£123.0m
Strategy in action
FY21/22
FY20/21
FY19/20
FY18/19
FY17/18
£102.6m
£122.8m
£53.6m
£(42.7)m
£20.9m
Strategy in action
-60 -30 0306090 120 150
Net debt
1
(£m) Net debt to adjusted EBITDA ratio
1
Scope 1 & 2 emissions (tCO
2
e)
2
FY21/2
2
FY20/21
FY19/20
FY18/19
FY17/18
£285.0m
£332.7m
£429.6m
£469.9m
£496.4m
Strategy in action
0100 200300 400500
FY21/22
FY20/21
FY19/20
FY18/19
FY17/18
1.7
✕
2.0✕
2.8✕
3.2✕
3.6✕
Strategy in action
0.00.5 1.01.5 2.02.5 3.03.5 4.0
FY21/22
FY20/21
56,188
60,360
Strategy in action
£148.3m
Trading profit
+11.9% versus two years ago and in line
with prior year (on a 52 week basis)
1
12.1p
Adjusted EPS
+35.7% versus two years ago and +10.5%
versus prior year
1
1.20p
Final dividend
of 1.20p per share proposed,
up 20% on prior year
£286.0m
Sales of products that meet
high nutritional standards
1
Revenue and Trading profit for FY20/21 are shown on a 52 week basis for comparison with prior years and EBITDA is on an adjusted basis. A reconciliation between 52 week and
53 week performance and a definition and reconciliation of non-GAAP measures to reported measure is set out on pages 49 and 50.
2
Total Scope 1 & 2 gross location based emissions (tonnes of Co
2
e).
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 06
About Premier Foods 08
Our purpose 10
Our business model 11
Our values and culture 12
Our Strategy 14
Chairman’s statement 16
Chief Executive’s review 18
Key performance indicators 20
The Enriching Life Plan 24
Climate-related disclosures 36
Operating and financial review 41
Risk management 51
Viability statement 58
Strategic
report
Oxo Rubs and Marinades
Part of our strategy is to expand our
brands into new categories and we
now have five brand extensions in
market, including a delicious new
range of Oxo Rubs and Marinades.
Premier Foods plc
www.premierfoods.co.uk
 07
Flavourings &
Seasonings
Quick Meals,
Snacks & Soups
Ambient
Desserts
Cooking
Sauces &
Accompaniments
Ambient
Cakes
About Premier Foods
As one of UK’s leading food businesses, we’re passionate about food and believe, each and every
day, we have the opportunity to enrich life for everyone. Premier Foods employs over 4,000 people
operating from 15 sites across the country, supplying a range of retail, wholesale, foodservice and
other customers with our iconic brands which feature in millions of homes every day.
Source: Category position and market share: IRI 52 weeks ending 26 March 2022; penetration: Kantar FMCG panel, 52 weeks ending 20 March 2022.
Categories Brands PenetrationShare
44%
34%
37%
15%
Position
1
1
1
1
1 24%
67%
43%
54%
52%
64%
Through some of the nation’s best-loved
brands, we’re creating great tasting
products that contribute to healthy
and balanced diets, while committing
to nurturing our people and our local
communities, and going further in the
pursuit of a healthier planet, in line with
our purpose of Enriching Life Through Food.
UK Grocery Business
We operate primarily in the ambient food
sector, which is one of the largest sectors
within the total UK grocery market. We
operate in four key Grocery categories:
Flavourings & Seasonings; Quick Meals,
Snacks & Soups; Ambient Desserts and
Cooking Sauces & Accompaniments. Within
Sweet Treats we operate in the Ambient
Cakes category. Our brands are leaders
in their categories with high household
penetration, and 86% of our total revenue
comes from branded products.
In addition, the Group has a portfolio
of other branded food products, a non-
branded food business which manufactures
products, such as cakes and desserts,
on behalf of many of the UK’s leading
food retailers, as well as a B2B business
supplying food products and ingredients.
International Business
We are growing our international business
through the application of our brand
building capabilities and executional focus
in our priority markets. We have significant
businesses in Ireland and Australia, with
established relationships with the major
food retailers. We are also developing
opportunities to expand Mr Kipling and
Sharwood’s cooking sauces in a number
of markets, including North America
and Europe. The International business
delivered a strong performance in the
year and accounts for around 6% of Group
revenue.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 08
Strategic partnerships
Nissin
We entered into a co-operation
agreement with Nissin Foods Holdings
Co., Limited (‘Nissin’) in 2016, and have
launched Batchelors Super Noodles in a
new pot format, using Nissin’s leading
noodle technology and manufacturing
expertise. In addition, we have taken
on distribution of Nissin’s Soba noodles
and brought the Cup Noodle brand to
the market. Nissin noodles have grown
market share from 16% in 2017 to 48%
today, and are now the market leader in
the authentic snack pot market.
Mondelēz International
In 2017, we signed a new strategic global
partnership with Mondelēz International
to renew the Company’s long-standing
licence to produce and market Cadbury
branded cake, as well as home baking
and ambient dessert products. The
partnership covers multiple countries and
has the potential to use the full range of
Cadbury brands in ambient cake.
Customers
We operate a multi-format, multi-channel approach to serving a broad range of
customers, including major UK supermarkets, discounters, e-commerce channels,
convenience stores, wholesalers and foodservice operators.
Carlton Bakery
Mr Kipling and
Lyons cakes
Moreton Bakery
Cadbury cakes
Charnwood
Pizza bases
Ashford
Angel Delight,
Batchelors,
Bisto & Paxo
Andover Mill
McDougalls Flour
Lifton
Ambrosia, Birds &
Cadbury desserts
Knighton
Birds, Marvel and
B2B ingredients
Grocery factories
Sweet Treats factories
Distribution centres
Central and
corporate services
Where we operate
Worksop
Batchelors, Bisto,
Homepride, Loyd
Grossman, Oxo &
Sharwood’s
Stoke Bakery
Mr Kipling cakes
Premier Foods plc
www.premierfoods.co.uk
 09
STRATEGIC REPORT
Our purpose
Our purpose
reminds us
what we’re
here to do –
enrich life
through food.
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→ Read more about our Enriching Life Plan
on pages 24 to 35.
It guides us, it motivates us, and it’s reflected in every element
of how we run our business today. It means enriching life for
our consumers by ensuring that the food we create helps enable
people to lead sustainable, healthier lifestyles.
Enriching Life through Food is about making
food in a way that respects the world’s
resources, the same resources we rely
on to make our delicious food. Whether
that’s reducing our environmental footprint
through climate action, reducing food
waste, or maintaining high ethical standards
across our supply chain.
It also means enriching life for our
colleagues by creating an inclusive culture
of entrepreneurship, where people
can reach their full potential, as well
as attracting the very best talent and
embracing diversity along the way.
By continuing to enrich the lives of our
consumers and our colleagues as well as
the planet we live on, we can nurture our
business effectively and sustainably, and
look forward to many more years of healthy
growth ahead of us.
Enriching Life Plan
As part of our commitment to being a
responsible food business, we have also
reflected our purpose in our strengthened
ESG strategy, the Enriching Life Plan.
Having spoken to a range of our
stakeholders - including customers,
colleagues, scientists, campaigners, trade
groups and policy makers - we’ve launched
a range of new sustainability commitments.
Our Enriching Life Plan covers all aspects of
sustainable development and encompasses
everything we touch, from the ingredients
we source, to the communities we serve.
The 2030 plan will focus our work in
three main areas: making great-tasting,
nutritious and more sustainable products,
contributing to a healthier planet and
nourishing the lives of our colleagues and
communities.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 10
Our branded growth model
Our capabilities
Our business model
Consumer insight
We use our insights,
gained from consumer
research and our
knowledge of food trends,
to build an understanding
of what our consumers
want, so that we can
develop and launch
products that meet their
needs.
Colleagues
We have talented
management teams,
with a broad and deep
understanding of the food
industry, and capable,
loyal and diverse teams
across our manufacturing
sites, office locations and
support functions.
Sourcing
We are committed
to producing high-
quality food that is
sourced in a fair, ethical
and environmentally
responsible way.
Manufacturing
Our manufacturing
capability gives us the
scope to manufacture a
diverse range of products
and formats to service a
wide range of customers.
We have leading standards
of safety, both for our food
and our colleagues.
LEADING
BRAND
POSITIONS
+
INSIGHT
DRIVEN NEW
PRODUCTS
+
SUSTAINED
MARKETING
INVESTMENT
+
RETAILER
PARTNERSHIPS
Leading brand
positions
Our brands are leaders in
their categories with high
household penetration.
Insight driven new
products
We launch new products
linked to key consumer
trends, with a major focus
on health & nutrition.
Sustained marketing
investment
We create emotional
connections through
media, to build brands,
maintain awareness and
keep them contemporary.
Retailer
partnerships
Our partnerships are
focused on driving mutual
category growth and
delivering outstanding in-
store execution.
Consumers and
customers
By creating and
launching new
products that meet
consumers’ needs, we
can help our customers
to drive category
growth.
5
brand extensions
in market
Colleagues
We’re committed to
creating a truly great
place to work for our
4,000 colleagues, which
provides opportunities
to develop and grow in
an inclusive and diverse
environment.
88%
colleague survey
response rate
Suppliers
We develop strong
relationships based on
mutual respect and
trust, to source high-
quality ingredients at
the right price for the
long-term benefit of
both parties.
97%
of our spend is with our
top 500
suppliers
Shareholders
Our business model is
focused on delivering
sustainable profitable
growth and long-term
shareholder value. In
2021, we reinstated
dividend payments and
have recommended a
20% increase to the final
dividend this year.
+23%
shareholder return over
the last year
Communities
We build strong
bonds with the local
communities in which
we operate, providing
long-term employment
opportunities and
make meaningful
contributions through
our charitable giving.
600,000 ~
meals donated to those
in food poverty.
1
1
See page 163 for a definition.
Our branded growth model is at the heart of what we do, and is core to the delivery of our Group
strategy. It’s how we identify and develop insight-driven new product innovation, and bring it to
market with compelling marketing and outstanding in-store execution.
How we deliver value for our stakeholders
 11
STRATEGIC REPORT
Premier Foods plc
www.premierfoods.co.uk
Our values and culture
Evolving our culture
As a result of the Covid-19 pandemic,
during the past two years we have taught
ourselves how to adopt new ways of
working. To keep us all safe in our factories
or in our own homes, meant that we had
to ‘be agile’ and adapt quickly, which we
did very successfully. As the world evolved,
we took the lessons we learned from
lockdown, and seized the opportunity to
adapt again and continue our success as
a business, by looking through a different
cultural lens. We wanted to stretch our
thinking to create mutual flexibility for
our colleagues, and the business, by
bringing a culture that fosters trust and
delivers outperformance. To achieve this,
we initiated a new flexible ‘hybrid’ way of
working, called Project Boomerang. We
encouraged all colleagues and managers
to challenge previous assumptions around
what is possible when working flexibly,
whilst still delivering against our goals to
help the business achieve its ambitions.
Colleague engagement
This year we undertook a Group-wide
colleague survey to understand how we
are progressing as an organisation and
to provide insight on how colleagues
are feeling, following what has been a
challenging period for us all. We were
delighted to achieve an 88% response rate,
and will be reviewing the responses to
identify an action plan for the coming year.
Inclusion and Diversity (‘I&D’)
At Premier Foods we believe in inclusion,
authenticity and individuality. We aim to
ensure all colleagues are given equitable
opportunities and are respected, valued
and encouraged to bring their true
authentic selves to work, no matter who
they are, what they look like, who they love
or what they believe in. Our culture is one
where everyone is welcome, and our aim is
to create an environment where we all feel
we belong and are empowered to fulfil our
potential.
Our strategy leads with inclusion, as it
means everyone can impact change and
collectively, we can create an environment
for diversity in all its forms to thrive.
We have four key areas of focus:
Leadership: our I&D agenda is passionately
sponsored by our Executive Leadership
Team (‘ELT’), and we regularly challenge
ourselves about what we can do to
maximise our impact and accelerate the
progress of our I&D programmes by, for
example, participating in and promoting all
our key I&D events.
Education: we raise awareness across
the business through an educational
programme of events throughout the year,
such as celebrating Pride, International
Women’s Day and Black History Month.
We invite external speakers, share key
facts and host colleagues story telling
panels, to encourage our teams to embrace
inclusivity and become proactive allies to
all represented groups that our colleagues
bring to our organisation.
We’re
determined to
be the best,
consistently
delivering at the
highest level.
We’re creative
in what we
do and how
we do it.
We’re energetic
and act
with pace.
We achieve
more when we
work together.
We bring out
the best in
each other.
88%
response rate to our
2022 engagement
survey
91%
of colleagues feel
trusted to do their
jobs effectively
An important element of our new purpose is to enrich the life of our colleagues, by creating an
inclusive culture of entrepreneurship, where people can reach their full potential, as well as attracting
the very best talent and embracing diversity.
As one of the UK’s leading food
businesses, we employ over 4,000
colleagues, and we’re committed to
creating a truly great place to work.
Our shared values are the DNA of our
business and act as our moral compass,
helping guide us in the way we do things.
They give us a common framework
for decision making and enable us to
challenge ourselves, and each other, to
ensure we live them day-by-day.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 12
Recruitment: we ensure our recruitment
and talent processes are equitable,
inclusive and transparent, as well as
educating our teams on how to ‘recruit
without bias’.
Ways of working: we know the importance
of making sustainable change and are
continually reviewing our policies,
processes, and ways of working, to ensure
diverse and inclusive thinking is embedded
into all areas of the business.
Finally, to enable us to track our progress,
we have developed an I&D scorecard that is
reviewed by our ELT on a quarterly basis, in
line with other business KPIs as part of our
business cycle.
We are proud of our #oktobeme
programme, which is being rolled out to
everyone across the business. Just as the
names suggests, we passionately believe
that everyone can thrive when they bring
their true authentic selves to work. Our
bespoke #oktobeme training aims to
support managers and colleagues, by
equipping them with the knowledge and
tools they need to become an inclusive
ally and to help create a safe space for
everyone.
Our Leadership training sessions were
delivered using a combination of inclusive
leadership insights with the support of an
external consultant, Charlotte Sweeney
Associates OBE (CSA), as well as bringing
inclusivity to life with the support of
an organisation known as ‘The Human
Library’ - an international, not-for-profit
organisation, that aims to address people’s
prejudices by helping them to talk to
people they would not normally meet.
These innovative one-day learning events
were experienced by over 900 of our
colleagues.
This was followed by taking our factory
management teams through a tailored
inclusive leadership workshop, supported
by a highly interactive game designed to
challenge biases and stimulate debate. The
content focuses on explaining the different
protected characteristics highlighted
in the Equality Act (age, disability,
gender reassignment, marriage and civil
partnership, pregnancy and maternity,
race, religion or belief, sex, and sexual
orientation), helping individuals to become
aware of their own biases, understand
how to be an inclusive manager and, more
importantly, how to create a safe space
to challenge the thinking around having
conversations on I&D.
Our Enriching Life Plan
Further information on how we are building
the culture, skills and capabilities of our
business is set out in the People pillar of
our Enriching Life Plan on pages 34 and 35.
Premier Foods plc
www.premierfoods.co.uk
 13
STRATEGIC REPORT
Our strategy
Continue to grow
the UK core
Supply chain
investment
What this means
We invest in our operational
infrastructure to increase
efficiencies across our
manufacturing and logistics
operations, facilitate growth through
our innovation strategy and enhance
the safety and working conditions of
our colleagues.
Strategy in action
During the year, we invested in a
new manufacturing line at our site
in Ashford, Kent.
This investment delivers a number
of benefits for us: (i) improved
efficiency, driving increased
capacity and lower cost per unit;
(ii) enabled us to bring in-house
the manufacture of a pot snack line
that was previously outsourced;
(iii) enhances flexibility for future
new product lines; and (iv) delivers
products with recyclable packaging.
Consequently, this has improved
the profitability of these Sharwood’s
and Batchelors pot products and has
provided funds for re-investment
behind our brands, such as
television advertising. In turn, this
investment delivers opportunity for
us to deliver further brand growth.
Future priorities
We have a number of capital
projects in our pipeline which have
attractive payback returns.
These cover a wide variety of
projects and include a range of
efficiency improvement initiatives
across our operational sites, the
objective of which is to drive gross
margin improvement.
Link to KPIs
• Free cash flow
What this means
A vibrant and growing UK business
provides the foundation for broader
expansion.
Strategy in action
The branded growth model which
we employ in the UK is at the heart
of what we do and is core to our
success. With our leading category
positions, we launch new products
to market linked to key consumer
trends, supported by sustained
levels of marketing investment and
delivered through strong customer/
retailer partnerships. Over the last
four years, we have delivered a
branded revenue CAGR (compound
annual growth rate) of over 4%,
within the UK.
One of our key focus areas is to
launch new product ranges which
provide consumers with more
healthy and nutritious options
to incorporate into their diet.
Some examples of ranges we have
launched in the last year include
Sharwood’s deliciously vegan curry
sauces, Low Salt Paxo Stuffing and
no added sugar Loyd Grossman and
Homepride cooking sauces. Over the
past year, six of our major brands
have benefited from advertising
investment. Delivering sustained
levels of brand investment, is key
to maintain and increase brand
awareness. In particular, our
advertising focuses on building
emotional connections with
consumers.
Future priorities
We have strong plans in place to
launch a range of new products in
FY22/23. This includes the launch
of a ‘Deliciously Good’ range of
healthier Mr Kipling cake, and also
the launch of Bisto Best meat free.
Link to KPIs
• Revenue
• Trading Profit
 14
Expand UK into
new categories
Build International businesses
with critical mass
Inorganic
opportunities
What this means
Expanding our product portfolio
and applying our brand building and
commercial expertise to accelerate
value creation.
Strategy in action
We have recruited a Corporate
Development Director who brings
deep consumer sector and Mergers
& Acquisitions (M&A) experience
and insight and reports to our CEO.
This appointment has enabled
the business to increase its
engagement with key external
contacts/stakeholders and assess
opportunities which may fit with our
strategy.
We employ a strict set of criteria on
which to assess such opportunities
for their respective fit with our
strategic plans and ability to deliver.
Future priorities
Under this pillar of our strategy, we
are exploring modest and targeted
opportunities with the objective
of accelerating the growth profile
of the Group, while ensuring close
alignment with current consumer
trends.
We will share updates on further
developments regarding external
opportunities in due course.
Link to KPIs
• Revenue
• Trading profit
What this means
Building sustainable overseas
business units with critical mass,
applying and tailoring our brand
building capabilities.
Strategy in action
We have a well established business
in the Republic of Ireland which
benefits from some leading category
positions in this market.
Our strategy is to accelerate our
growth by utilising some of the
proven branded growth model
approaches used in the UK and
applying them to the Republic of
Ireland. For example, we have taken
some of the successful product
innovation launched in the UK
and introduced these in Ireland,
including new product development
and television advertising, entering
new categories such as Quick Meals
Snack & Soups and Homebaking,
and launching Mr Kipling new
product development such as the
premium signature range.
Our International business delivered
a 25% increase in revenue, on a
constant currency basis, versus
the same period two years ago,
with growth in the vast majority of
markets.
Future priorities
We will continue to apply our
proven branded growth model in
Ireland, through launching new
products, investing in our brands
and executing strongly in-store.
We have recently commenced a
trial of Mr Kipling cakes in some
selected retailers in the US and
are expanding our distribution in
Canada. In Europe, we are driving
further Sharwood’s distribution in
our target markets.
Link to KPIs
• International revenue
What this means
Leveraging the strength of our
brands and our proven branded
growth model by launching into
new, adjacent product categories.
Strategy in action
Our largest brand by sales, Mr
Kipling, has long been the market
leader in ambient cake.
Mr Kipling has grown strongly
over recent years reflecting a
successful innovation programme
and sustained levels of marketing
investment. With this background,
in FY21/22 we entered a naturally
adjacent category for Mr Kipling,
Biscuits. We initially launched a
range of three products, focused
on the special treat part of the
everyday biscuits market.
Another category which we have
expanded into during FY21/22,
utilising the strength of our brand
equities has been ice cream. Here,
we are leveraging some of the
iconic flavour variants for each of
our Mr Kipling, Ambrosia and Angel
Delight brands by launching a range
of ice cream tubs. Initial sales have
been encouraging, with over £1m
of revenue from one customer
generated in a short time.
Future priorities
Looking ahead, we have just
launched a range of Ambrosia
ready to eat porridge pots. This is
our first foray into the breakfast
eating occasion, and leverages the
creaminess attributes which the
Ambrosia brand is well known for.
Link to KPIs
• Revenue
• Trading profit
Premier Foods plc
www.premierfoods.co.uk
 15
STRATEGIC REPORT
Chairman’s statement
This year was one of significant strategic progress, as we continued to grow our core UK business
through our successful branded growth model, whilst further strengthening our financial position to
reinvest back into our brands, operations and people, thereby enabling the next phase of growth.
This report covers FY21/22, the financial
year for the 52 weeks ending 2 April 2022.
However, due to the exceptional levels of
demand experienced during the peak of the
Covid-19 pandemic in the prior year, we are
also comparing performance versus two
years ago.
The Group’s revenue reached £900.5m,
an increase of +6.3% versus two years ago
and -3.6% versus one year ago
1
. Trading
profit grew +11.9% to £148.3m versus two
years ago and was flat versus prior year
1
.
Meanwhile, adjusted profit before tax grew
+37.6% to £128.5m, versus two years ago,
and +11.4% versus prior year
1
, and Net
debt
1
for the Group reduced by £47.7m to
£285.0m over the year.
External climate
The Group continued to manage the
Covid-19 pandemic well, keeping the
wide-ranging safety measures put in
place last year under constant review, and
adapting regularly to reflect the changing
environment in which the Company
operates. This kept colleagues safe, sites
operational and customers stocked with our
products.
The situation in Ukraine has led to
significant global uncertainty and disruption
to supply chains. As a business, we don’t
have any operations in Russia or Ukraine,
however, we continue to monitor and
effectively manage any impact of the wider
macro environment on the Company’s
supply chain. We also played our part in
supporting the efforts to contend with the
humanitarian crisis, by donating £100,000
to the British Red Cross through the DEC
Ukraine Humanitarian Appeal.
The business continues to manage the
unprecedented inflationary environment
seen by the whole food industry. A
combination of strong relationships
with our retailer partners, cost saving
programmes and pricing, allow us to
continue mitigating this impact.
Governance and the Board
This year, I have been pleased to welcome
new members to our Board. In January
2022, we announced the appointment of
Tania Howarth as an independent non-
executive director and a member of the
Audit, Remuneration and Nomination
Committees. Tania brings with her
extensive senior executive experience
across global FMCG businesses.
This was followed on 1 April, by the
appointment of Lorna Tilbian as an
independent non-executive director and
member of the Nomination Committee.
Lorna brings considerable experience across
investment banking, financial analysis and
senior leadership.
On 21 April, we confirmed that Pam Powell
would be retiring at the July AGM, at the
end of her third term of appointment,
following nine years as an independent
non-executive director, latterly as
remuneration committee chair. I would like
to thank Pam for her valuable contribution
in supporting the businesses turnaround
during that time.
In conjunction with Pam’s retirement, we
announced the appointment of Roisin
Donnelly as an independent non-executive
director, commencing 1 May. Roisin brings
over 30 years’ FMCG marketing and
brand building experience. I would like to
welcome Tania, Lorna and Roisin to the
Board as we continue to pursue our growth
strategy and path to further value creation.
The Board made it a priority last year to
address its gender diversity and I’m pleased
to announce that we now meet the current
standard set by the Hampton-Alexander
Review for 33% female representation on
our Board. We will look to align with the
new FTSE Women Leaders Review targets,
announced in February 2022, as soon as
practicable.
Financial position
During the first half of the year, the
Group completed the refinancing of
a new Revolving Credit Facility (‘RCF’)
with a refreshed bank group, extending
the maturity to at least 2024. Following
the year end, the Group completed the
first extension of the RCF to May 2025.
In addition, we launched a new £330m
Fixed Rate Bond due October 2026. This
refinancing gives us greater financial
strength, to pursue our five strategic
priorities: building the core; investing
in infrastructure; expanding into new
UK categories; building international
businesses with critical mass; and investing
in bolt-on acquisitions. The strength of
the Group’s financial position is also a
direct result of the continued success of its
branded growth model.
The Group’s financial position has been
transformed in recent years, demonstrated
by the Group receiving two consecutive
upgrades from credit rating agency S&P
Global Ratings in a period of less than
12 months. In May 2022, the Company
announced a significant reduction in the
deficit of the two Premier Foods pension
schemes, resulting in a circa 20% reduction
in the net present value of future deficit
contributions. This reflects the anticipated
benefits of the transformational pension’s
agreement announced in April 2020.
The Group’s financial position has been transformed
in recent years, resulting in a significant increase in
shareholder value creation and greater financial strength
to reinvest back into our brands, operations and people,
thereby enabling our next phase of strategic growth.”
Colin Day
Chairman
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 16
We continue to make progress towards
the Group’s target for Net debt/adjusted
EBITDA
1
of approximately 1.5x. During
the year, we reduced Net debt further to
reach £285.0m, with Net debt/adjusted
EBITDA
1
now at 1.7x. After reinstating our
dividend last year for the first time in 13
years, I am pleased to confirm that, subject
to shareholder approval, the directors have
proposed a final dividend of 1.20 pence per
share for the 52 weeks to 2 April 2022, a
+20% increase on prior year.
Board priorities and
shareholder feedback
The Board and management team remain
committed to successfully delivering the
Group strategy and taking the business
to the next stage of growth, including
reviewing opportunities for bolt-on
acquisitions, to broaden our existing
portfolio and deliver value creation for
shareholders.
We will also continue to build on the
significant progress made over the past few
years to strengthen the Group’s financial
position, enabling us to reinvest in the
business to deliver further growth and
returns for shareholders.
In October 2021, the Group announced a
refreshed ESG strategy, the Enriching Life
Plan. This plan builds on the Company’s
progress so far and stretches our ambitions.
It sets out how we intend to create
more nutritious, sustainable food for our
consumers; take meaningful steps towards
a healthier planet; and help to enrich the
lives of our colleagues and communities. I
share the view of the Executive team that,
as a business, we have an opportunity, as
well as a responsibility, to create a healthier
future for the consumers that buy our
products.
Inclusion & Diversity remains a key focus
area for the business, and the Group is
enhancing its processes and procedures
to develop a strong female talent pipeline,
to support the delivery of its ESG target
to reach gender balance across the senior
leadership team by 2030. Further details of
the work being done to address diversity
across the business can be found on pages
12 and 13.
During the year, I was pleased to be able
to engage with many of our shareholders
and listen to their feedback on the strong
growth of the business over the last
few years, as well as understand their
perspectives on our strategy as we look to
expand. We will take these comments into
account, and I hope to meet many more of
you face-to-face over the coming year.
I’d like to take this opportunity to thank our
investors, colleagues, suppliers, customers
and consumers for their continued support.
We enter the new financial year with good
momentum, and a strengthened financial
position, to enable us to make continued
strategic progress and deliver significant
value for our shareholders in the years
ahead.
Colin Day
Chairman
18 May 2022
1
Revenue, Trading profit and adjusted profit before
tax for FY20/21, are on a 52 week basis to aid
comparison with the current year. A reconciliation
between 52 week and 53 week performance and a
definition and reconciliation of non-GAAP measures
to reported measures is set out on pages 49 and 50.
+14.3%
Reduction in Net debt
to £285.0m
1.20p
20% increase to final
dividend proposed
 17
STRATEGIC REPORT
Premier Foods plc
www.premierfoods.co.uk
Chief Executive’s review
It is now almost three years since I took on the role of Chief Executive. If anyone had told me in August
2019 that within three years, we would have encountered a global pandemic, industry-wide supply
chain challenges, significant political and economic uncertainty, and a major conflict in Europe, I would
not have believed them.
range of Loyd Grossman pizza products,
which we developed in response to the
recent trend for consumers to make their
own pizzas at home.
I was particularly proud of our teams
successfully achieving a seemingly
impossible challenge to create a range
of cakes which are both healthier and
taste great, with the April launch of our
new range of non-HFSS (non-high fat,
salt & sugar) Mr Kipling cakes. Bringing
healthier products to market in response to
consumer demand remains a key focus of
our NPD programme, and during the year
we launched no added sugar Homepride
pasta bakes, plus further plant-based
products such as Oxo meat free chicken
cubes.
Supporting our brands with emotionally
engaging marketing campaigns is a key
driver of our business model, and this
year we supported six of our brands with
significant investment in TV advertising and
digital activation.
The strength of our customer relationships
remain core to our growth model, and has
been particularly important this year as we
continued to successfully navigate the supply
chain challenges impacting the industry.
Working side by side with our retail partners,
we were also able to deliver excellent
in-store execution, including an on-pack
competition in partnership with FareShare
and Tesco - to support those in food poverty.
Significant strategic progress
Our Group strategy has five strategic
priorities centred around expansion, using
our brand building capabilities to expand
the business both in the UK and overseas,
while reinvesting to drive further growth.
Continuing to drive our core UK business,
is the first of these strategic pillars, and
central to providing the foundations for
broader expansion. Two-year branded sales
growth of nearly 10%, demonstrates the
continued successful deployment of our
branded growth model.
Investing in our operational infrastructure
is our second strategic pillar, facilitating the
production of new products and improving
efficiencies, allowing us to continue
reinvesting in our brands to drive growth,
forming a virtuous circle. Over the last year
we invested in two new high speed modern
production lines, at our Lifton Ambrosia
dairy and our Ashford factory. Both are
faster, more efficient and provide more
flexibility to manufacture products in our
NPD pipeline.
Our third strategic pillar is expanding into
new white space categories, leveraging
our core brand building capabilities. We
now have five brand extensions in market,
including launches into ice cream across
Mr Kipling, Ambrosia and Angel Delight,
a range of new biscuits targeting the
everyday treat, Cape Herb & Spice and Oxo
Rubs & Marinades, as well as entry into the
breakfast market with Ambrosia porridge
pots. All are showing promising early results
and we will continue to develop these over
the coming year.
We continued to make very encouraging
progress against our fourth strategic pillar,
delivering growth in international sales of
+25% versus two years ago. During the year,
we expanded the distribution of Sharwood’s
in Europe, Canada and the USA, leading to
double digit sales growth versus two years
ago. We also commenced a national rollout
of Mr Kipling in Canada, following a test
launch and refinement of the consumer
proposition. Meanwhile in the USA, Mr
Kipling is now in market with our first test
customer and we will be closely tracking
the performance to validate our approach.
As we look ahead, our financial position has been
transformed, and our Group strategy sets out clear
opportunities for further value creation, as we reinvest
in our business and apply our proven brand building
capabilities across a broader base of categories and
geographies.”
Alex Whitehouse
Chief Executive Officer
Chief Executive’s review
Yet here we are, living in an age of huge
change and uncertainty – but one thing
which has not changed, only grown, has
been the appeal and relevance of our
market leading brands.
What we saw throughout the pandemic,
is that during times of uncertainty,
people reach for brands they trust,
and which resonate with them and
their families. Our leading brands
carry that special affinity and have
continued to drive our performance,
as we grew faster than our categories
across both Grocery and Sweet Treats,
compared to two years ago. This strong
branded performance, reflecting the
success of our branded growth model,
alongside significantly reduced interest
costs, enabled us to deliver growth in
adjusted PBT
1
of +37.6% versus two
years ago and +11.4% versus last year.
Over the last two years, we have
completely transformed the financial
position of our business, reducing our
Net debt
1
to the lowest level in the
Company’s history
2
, and following a
successful refinancing last year nearly
halved our interest costs. I’m delighted
that in May 2022, we also announced a
£60m reduction in the net present value
(‘NPV’) of future pension contributions,
as we start to realise the benefits of
the landmark pensions agreement we
announced two years ago.
All of this is unrecognisable from the
business we were a few years ago. In
recognition of this and our growing
ambitions, we launched our new
purpose, Enriching Life Through Food.
It is about enriching the lives of our
consumers, our colleagues and the
planet, by ensuring the food we create
helps people to lead sustainable,
healthier lifestyles and enables our
business to look forward to many more
years of healthy growth.
Driving strong branded growth
Our consumers are at the heart
of our branded growth model and
therefore we put considerable focus on
understanding how people’s shopping,
cooking and eating habits are changing,
ensuring we develop highly relevant
new products that align to consumer
trends. A great example of this is our
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 18
Finally, our fifth strategic pillar is to
utilise our brand building and commercial
expertise to expand across a wider portfolio,
through modest and targeted acquisition
opportunities. We appointed a new
Corporate Development Director this year
to provide focus in this area.
Demonstrably stronger
financial position
Our balance sheet and financial position
have been transformed over the last few
years, following a significant reduction in
debt and an earnings-enhancing refinancing,
which together have seen us almost halve
our interest costs versus FY19/20.
A key part of that transformation is
the landmark pensions agreement
we announced two years ago. This is
now starting to deliver the benefits we
anticipated, with a significant reduction in
the actuarial deficit of the Premier Foods’
pension schemes announced in May 2022,
resulting in the NPV of future pension
payments reducing by approximately £60m.
This presents the first important deliverable
since the merger, bringing greater financial
security for the scheme members.
We continued to reduce our Net debt
1
,
which fell from £332.7m to £285m during
the year, bringing Net debt/adjusted
EBITDA
1
down to 1.7x, as we make further
progress towards our target of 1.5x.
Subject to shareholder approval we will pay
a final dividend of 1.2 pence per share, a
20% increase versus a year ago, in line with
our previously stated commitment to pay a
progressive dividend.
Our Enriching Life Plan
In October, we launched a stronger and
more ambitious ESG strategy, our Enriching
Life Plan. In recent years we have made
great strides towards a more sustainable
future, but we have now increased our
sustainability ambitions to go even further,
with a focus on three key pillars – product,
planet, and people - all in pursuit of our
new purpose, Enriching Life through food.
As a food business, it was important to me
that we put consumer health at the heart
of this strategy, ensuring we remain focused
on creating nutritious and sustainable food,
while reducing the environmental impact
of our packaging. Since FY18/19 we have
added more than 40 better-for-you healthier
alternatives within our product ranges. In
fact, 89% of our core ranges now have a
better-for-you option, while 96% of all our
packaging is also now recyclable.
To ensure we play our part in limiting
climate change, we made a leading
commitment to join the Business Ambition
for 1.5°C and introduced science-based
targets for both direct and indirect
emissions. We are also now using the TCFD
framework to report on our climate change
resilience and adaptation (see page 36).
Inclusion and Diversity (I&D) remains a
key priority for the Executive team, and
we passionately believe that everyone can
thrive when they bring their true authentic
selves to work, that’s why we trained more
than 900 colleagues in I&D as part of our
#oktobeme programme.
This year we were also very proud to be
awarded Tier 1 status by the Business
Benchmark on Farm Animal Welfare
(BBFAW), one of only four companies to be
awarded the highest level. This is testament
to the significant progress we have made
in animal welfare and the hard work across
the multiple teams involved.
As one of the UK’s largest food
manufacturers, I firmly believe we have a
powerful opportunity to positively influence
the nation’s health and forge a healthier
future for our people and our planet.
In summary
Last year was another year of significant
progress for Premier Foods, both in terms
of our financial performance and strategic
development.
I’d like to say a huge thank you to all of
our colleagues for their continued agility
and outstanding work. In what was often a
challenging macro environment, we once
again demonstrated the resilience of our
business in managing these challenges,
while delivering significant progress.
As we look ahead, our financial position
has been transformed, and our Group
strategy sets out clear opportunities for
further value creation, as we reinvest in
our business and apply our proven brand
building capabilities across a broader
base of categories and geographies. We’ll
do this while enriching the lives of our
consumers, our colleagues and our planet
and delivering healthy growth for all our
stakeholders.
Alex Whitehouse
Chief Executive Officer
18 May 2022
+11.4%
Increase in adjusted
profit before tax
96%
of our packaging
is now recyclable
1
Revenue, Trading profit and adjusted profit before tax for FY20/21, are on a 52 week basis to aid comparison with
the current year. A reconciliation between 52 week and 53 week performance and a definition and reconciliation of
non-GAAP measures to reported measures is set out on pages 49 and 50.
2
Historical Net debt/adjusted EBITDA leverage since public listing in July 2004.
 19
STRATEGIC REPORT
Premier Foods plc
www.premierfoods.co.uk
Key performance indicators
We use a number of performance indicators to monitor
financial, operational and ESG performance
Financial KPIs
Revenue
1
Trading
profit
1
Net debt adjusted
EBITDA ratio
1
£900.5m £148.3m 1.75
FY21/22
FY20/21
FY19/20
FY18/19
FY17/18
£900.5m
£934.2m
1
£847.1m
£824.3m
£819.2m
Why is this important?
Delivering sustainable revenue growth is one of our
strategic priorities.
Progress we have made
Revenue was up +6.3% versus two years ago,
although -3.6% lower than prior year (on a 52
week basis
1
), as we lapped exceptional pandemic
related volumes. This growth has been driven by our
branded growth model of delivering new product
innovation based on current consumer trends,
together with engaging advertising and strategic
relationships with our retail partners.
Why is this important?
This measure reflects the revenues and costs
associated with the operational performance of
the business and is also a good proxy for the cash
generative capacity of the business.
Progress we have made
Trading profit increased by +11.9% versus two
years ago and was flat versus prior year
1
. This
improvement was driven by our strong branded
revenue growth in both business segments.
Why is this important?
This ratio is the key metric used by the Group in
measuring its debt level relative to the overall
performance of the business.
Progress we have made
Net debt reduced by £47.7m, from £332.7m to
£285.0m, in the year. As a result of this deleveraging
and adjusted EBITDA growth, the ratio of Net debt
to adjusted EBITDA reduced from 2.0x to 1.7x.
(Note: the comparatives for FY17/18, FY18/19 and
FY19/20 are on a pre-IFRS 16 basis).
Link to strategy Link to strategy Link to strategy
Free
cash flow
1
International
Revenue
at constant currency
2
£65.2m
FY21/22
FY20/21
FY19/20
FY18/19
FY17/18
£65.2m
£71.2m
1,2
£70.5m
2
£50.5m
2
£45.8m
2
£54.8m
(FY20/21: £53.9m, 52 week basis)
Why is this important?
Expanding our International business is one of our
strategic priorities.
Progress we have made
International revenue, on a constant currency
basis
2
, was £54.8m, 25% higher than the same
period two years ago. This was the result of
growth in the majority of our markets, with strong
performances from Sharwood’s and Mr Kipling.
2
For a definition and reconciliation, please refer to
note 8, on page 50.
Link to strategy
Why is this important?
Free cash flow is a measure of the overall health
of the business. It reflects the underlying cash
generated by the Group and helps inform capital
allocation decisions.
Progress we have made
Free cash flow reduced by £6.0m in the year, to
£65.2m. Cash flow benefitted from the reduction in
interest costs following the issue of new Fixed Rate
Senior Secure Notes and reduced pension costs,
offset by higher working capital.
Link to strategy
Key
Continue to grow the UK core
Supply chain investment
Expand UK into new categories
Build International businesses with critical mass
Inorganic opportunities
These are reviewed on a regular
basis by our senior management
teams and the Board. Performance
indicators are used to encourage focus
on the delivery of our key strategic
priorities. They are used to measure
performance, highlight areas for
attention and corrective action, as well
as recognising good performance and
celebrating success. Trading profit and
certain ESG targets also form part of
management’s bonus objectives.
As highlighted in the Chairman’s
Statement on page 16, due to the
unique nature of the prior period,
where we saw exceptional patterns of
demand for our products during the
peak of the Covid-19 pandemic, we are
reporting our business performance
this year with reference to both two
years ago and the prior year.
We have reviewed our KPIs over the
year, to ensure they are aligned with
the Group’s strategy and also the
commitments set out in our refreshed
ESG strategy, the Enriching Life Plan. To
monitor the delivery of Group strategy
we have introduced a new Financial
KPI for International Revenue.
1
Revenue, Trading profit and Net debt adjusted
EBITDA ratio for FY20/21 are shown on a 52
week basis, to aid comparison with the current
year. Free cash flow for FY20/21 is on a 53
week basis. A reconciliation between 52 week
and 53 week performance and a definition
and reconciliation of non-GAAP measures
to reported measures is set out on pages 49
and 50.
2
Prior years have been represented, in
accordance with the revised definition of free
cash flow set out on page 50.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 20
Financial KPIs
Revenue
1
Trading
profit
1
Net debt adjusted
EBITDA ratio
1
£900.5m £148.3m 1.75
FY21/22
FY20/21
FY19/20
FY18/19
FY17/18
£148.3m
£148.3m
1
£132.6m
£128.5m
£123.0m
FY21/22
FY20/21
FY19/20
FY18/19
FY17/18
1.7
✕
2.0✕
1
2.8✕
3.2✕
3.6✕
Why is this important?
Delivering sustainable revenue growth is one of our
strategic priorities.
Progress we have made
Revenue was up +6.3% versus two years ago,
although -3.6% lower than prior year (on a 52
week basis
1
), as we lapped exceptional pandemic
related volumes. This growth has been driven by our
branded growth model of delivering new product
innovation based on current consumer trends,
together with engaging advertising and strategic
relationships with our retail partners.
Why is this important?
This measure reflects the revenues and costs
associated with the operational performance of
the business and is also a good proxy for the cash
generative capacity of the business.
Progress we have made
Trading profit increased by +11.9% versus two
years ago and was flat versus prior year
1
. This
improvement was driven by our strong branded
revenue growth in both business segments.
Why is this important?
This ratio is the key metric used by the Group in
measuring its debt level relative to the overall
performance of the business.
Progress we have made
Net debt reduced by £47.7m, from £332.7m to
£285.0m, in the year. As a result of this deleveraging
and adjusted EBITDA growth, the ratio of Net debt
to adjusted EBITDA reduced from 2.0x to 1.7x.
(Note: the comparatives for FY17/18, FY18/19 and
FY19/20 are on a pre-IFRS 16 basis).
Link to strategy Link to strategy Link to strategy
Free
cash flow
1
International
Revenue
at constant currency
2
£65.2m
FY21/22
FY20/21
FY19/20
FY18/19
FY17/18
£65.2m
£71.2m
1,2
£70.5m
2
£50.5m
2
£45.8m
2
£54.8m
(FY20/21: £53.9m, 52 week basis)
Why is this important?
Expanding our International business is one of our
strategic priorities.
Progress we have made
International revenue, on a constant currency
basis
2
, was £54.8m, 25% higher than the same
period two years ago. This was the result of
growth in the majority of our markets, with strong
performances from Sharwood’s and Mr Kipling.
2
For a definition and reconciliation, please refer to
note 8, on page 50.
Link to strategy
Why is this important?
Free cash flow is a measure of the overall health
of the business. It reflects the underlying cash
generated by the Group and helps inform capital
allocation decisions.
Progress we have made
Free cash flow reduced by £6.0m in the year, to
£65.2m. Cash flow benefitted from the reduction in
interest costs following the issue of new Fixed Rate
Senior Secure Notes and reduced pension costs,
offset by higher working capital.
Link to strategy
Premier Foods plc
www.premierfoods.co.uk
 21
STRATEGIC REPORT
Over the year we have introduced a number of new
Non-financial KPIs which align with our business model,
our refreshed ESG strategy and our commitment to be a
responsible food business.
Branded market
share (value growth)
1
Revenue from products
that meet high
nutritional standards
Women in
Leadership
+41bps
(FY20/21: +25bps)
£286.0m
(FY20/21: £320.0m)
37%
(FY20/21: 28%)
Why is this important?
Increasing market share indicates consumer
preference for our products and drives category
growth for the business.
Progress we have made
Our market share value grew by +41 basis
points (‘bps’), versus two years ago, to 24.5%.
With growth delivered in both the Grocery and
Sweet Treats markets, by 52bps and 23 bps,
respectively.
Why is this important?
Under our Enriching Life Plan we have set a
target to more than double sales of products that
meet high nutritional standards (see page 163 for
a definition).
Progress we have made
Over the year, we continued to bring a range of
more healthy product to market such as: Loyd
Grossman 30% less sugar Lasagne sauces, no
added sugar Homepride pasta bakes and Batchelors
low fat, meat free rice and noodle pots. Revenue
reduced in the period, reflecting the exceptional
patterns of demand for our products last year.
Why is this important?
Under our Enriching Life Plan we are targeting
gender balance for our senior management
population by 2030.
Progress we have made
Over the year, the number of women within
senior leadership increased to 37%, as we
progressed our I&D strategy to improve
accessibility to leadership roles through
enhanced recruitment, development and
mentoring programmes.
Link to strategy
Link to strategy
Link to strategy
Supports our Enriching Life Plan
Scope 1 & 2 emissions
(tCO
2
e) RIDDORs
56,188
(FY20/21: 60,360 (tCO
2
e))
0.12
(FY20/21: 0.02, RIDDOR reportable accident
per 100,000 hours worked.)
Why is this important?
Reducing carbon emissions is a key priority under
our Enriching Life Plan, as we aim to reduce scope
1 & 2 emissions by 42% in our direct operations
and achieve Net Zero carbon emissions by 2040.
Progress we have made
Total Scope 1 & 2 location based emissions fell
by 6.9% over the year, as a result of improved
efficiency from capital investment in projects
such as boiler upgrades, compressor renewals
and LED lighting.
Link to strategy
Supports our Enriching Life Plan
Why is this important?
Colleague safety is our first priority as a business.
Progress we have made
We saw an increase in RIDDORs, due
predominantly to minor injuries, such as slips and
trips. We are working with colleagues across the
business to address this as a matter of priority
over the coming year.
Our Total Observation Process has continued
to be successful in identifying hazards in the
business and ensuring they are addressed before
an incident occurs.
Link to strategy
Supports our Enriching Life Plan
Non-financial KPIs
Key performance indicators CONTINUED
Key
Continue to grow the UK core
Supply chain investment
Expand UK into new categories
Build International businesses with critical mass
Inorganic opportunities
Launching new products based on
consumer trends, with a major focus
on health and nutrition, is at the heart
of our branded business model.
In October 2021 we launched a
refreshed ESG strategy the Enriching
Life Plan. To align with our new ESG
priorities we have included a KPI to
represent each of the pillars of the
Enriching Life Plan: Product – sales of
products that meet high nutritional
standards; Planet – CO
2
emissions; and
People – Women in leadership.
Further details of progress against our
ESG targets is set out in the section
on our Enriching Life Plan on pages 24
to 35 and in additional disclosures on
pages 163 to 168.
Colleague safety is our first priority as
a business. The Reporting of Injuries,
Diseases and Dangerous Occurrences
Regulations (‘RIDDOR’), is a major
indicator of the success of our Health
and Safety protocols and allows us to
benchmark our performance against
the UK food manufacturing industry.
1
IRI data for the 52 weeks ending 26 March
2022, 27 March 2021 and 28 March 2020.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 22
Branded market
share (value growth)
1
Revenue from products
that meet high
nutritional standards
Women in
Leadership
+41bps
(FY20/21: +25bps)
£286.0m
(FY20/21: £320.0m)
37%
(FY20/21: 28%)
Why is this important?
Increasing market share indicates consumer
preference for our products and drives category
growth for the business.
Progress we have made
Our market share value grew by +41 basis
points (‘bps’), versus two years ago, to 24.5%.
With growth delivered in both the Grocery and
Sweet Treats markets, by 52bps and 23 bps,
respectively.
Why is this important?
Under our Enriching Life Plan we have set a
target to more than double sales of products that
meet high nutritional standards (see page 163 for
a definition).
Progress we have made
Over the year, we continued to bring a range of
more healthy product to market such as: Loyd
Grossman 30% less sugar Lasagne sauces, no
added sugar Homepride pasta bakes and Batchelors
low fat, meat free rice and noodle pots. Revenue
reduced in the period, reflecting the exceptional
patterns of demand for our products last year.
Why is this important?
Under our Enriching Life Plan we are targeting
gender balance for our senior management
population by 2030.
Progress we have made
Over the year, the number of women within
senior leadership increased to 37%, as we
progressed our I&D strategy to improve
accessibility to leadership roles through
enhanced recruitment, development and
mentoring programmes.
Link to strategy
Link to strategy
Link to strategy
Supports our Enriching Life Plan
Scope 1 & 2 emissions
(tCO
2
e) RIDDORs
56,188
(FY20/21: 60,360 (tCO
2
e))
0.12
(FY20/21: 0.02, RIDDOR reportable accident
per 100,000 hours worked.)
Why is this important?
Reducing carbon emissions is a key priority under
our Enriching Life Plan, as we aim to reduce scope
1 & 2 emissions by 42% in our direct operations
and achieve Net Zero carbon emissions by 2040.
Progress we have made
Total Scope 1 & 2 location based emissions fell
by 6.9% over the year, as a result of improved
efficiency from capital investment in projects
such as boiler upgrades, compressor renewals
and LED lighting.
Link to strategy
Supports our Enriching Life Plan
Premier Foods
All UK manufacturing
UK food manufacturing
0.12
0.22
0.52
Why is this important?
Colleague safety is our first priority as a business.
Progress we have made
We saw an increase in RIDDORs, due
predominantly to minor injuries, such as slips and
trips. We are working with colleagues across the
business to address this as a matter of priority
over the coming year.
Our Total Observation Process has continued
to be successful in identifying hazards in the
business and ensuring they are addressed before
an incident occurs.
Link to strategy
Supports our Enriching Life Plan
Non-financial KPIs
Premier Foods plc
www.premierfoods.co.uk
 23
STRATEGIC REPORT
The Enriching Life Plan:
bringing our purpose to life
As one of the UK’s leading food businesses and home to some of the nation’s most loved
and iconic brands, we have both an opportunity and a responsibility to forge a healthier
future for our people and our planet.
We are very proud of what we’ve achieved over the last few years, however, now is the time to push ourselves harder; harder
for the health of our consumers; and harder for the health of our planet and the communities we serve. Having spoken to
a range of our stakeholders including customers, colleagues, scientists, campaigners, trade groups and policy makers, we’ve
strengthened our sustainability commitments in pursuit of our purpose, Enriching Life Through Food.
Our new strategy, the Enriching Life Plan covers material aspects of sustainable development and encompasses everything
we touch, from the ingredients we source, to the communities we serve. It sets out how we can challenge ourselves more
to fulfil our responsibility as a business by making nutritious and sustainable food, contributing to a healthier planet and
nourishing the lives of our colleagues and communities. It sets our scope of work for the next decade, with targets to 2030.
Our new ESG Strategy: The Enriching Life Plan
 24
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
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Partnership for our targets
Our new ESG Strategy: The Enriching Life Plan
In order to help shape a more sustainable food system
for all our stakeholders, we are members of many
industry-leading groups, which are platforms for
collaboration and action. As signatories and members to
these initiatives, we hold ourselves accountable against
industry-wide targets and strive to push ourselves to
contribute to wider change. These include:
Headline targets*
Our Products Our Planet Our People
More than
double
sales
of products
that meet high
nutritional
standards
Develop
validated
Science-
based
Targets
aligned with
Business Ambition
for 1.5°C
Achieve
Gender
balance
in our senior
leadership team
More than
50% of our
products (by
SKU) will provide
additional
health or
nutrition
benefits
Reduce scope
1 and 2
emissions by
42% by 2030
and achieve net
zero by 2040; and
reduce
scope 3
emissions by
25% by 2030
and target net zero
by 2050
Provide skills
programmes
and
work
opportunities
for excluded
groups
to
enable fulfilling
careers in the
Food Industry
Grow sales of
plant-based
products
to £250m
per annum
Zero
deforestation
across entire
supply chain
Donate
1 million
meals
per
annum to
those in
food poverty
100% of our
packaging will
be
reusable,
recyclable or
compostable
by 2025
Halve our food
waste
and
support our
suppliers and
consumers to do
the same
Be more of a force
for good in our
communities by
volunteering
at least 1,000
colleague
days
a year
Baked In behaviours
Being safe Excelling in food quality
Doing the right thing Protecting
the environment
Marketing responsibly Sourcing with care
*All targets are for 2030 against a 2020 baseline unless otherwise stated
Premier Foods plc
www.premierfoods.co.uk
 25
STRATEGIC REPORT
RSPO use of logo: License number: 4-0019-06-100-00.
Check our progress at https://rspo.org/members/103/Premier-Foods-Group-Limited
Being a responsible business is not new at Premier Foods and our strengthened Enriching Life Plan
builds on the great progress made over recent years. The landscape is rapidly evolving, and it is
important that our strategy enables us to effectively tackle emerging issues and meet evolving stakeholder
expectations. We’ve therefore taken stock of the external landscape, to understand our role as a major UK
food manufacturer, undertaken a materiality assessment to identify areas where we can have the biggest
impact, set bold new targets and established a new governance structure to drive our progress forwards.
Building on our great progress
We’re proud of the progress we’ve made
over the last few years. Working in support
of the Government’s sugar, salt and calories
reformulation programmes, our R&D
teams have removed over 1,000 tonnes
of salt and 1,100 tonnes of sugar from our
recipes. Since 2018, we have innovated and
brought to market more than 40 better-for-
you healthier alternatives of the nation’s
favourites; including Mr Kipling 30% reduced
sugar slices Angel, Chocolate and Lemon
variants, 30% reduced fat Sharwood’s butter
chicken cooking sauce, Paxo Low salt sage &
onion stuffing, and 89% of our core ranges
now have a better-for-you option.
Collaborating with our suppliers across
our value chain, we have looked to
source ingredients and packaging to high
environmental standards: all the corrugated
paper and carton board we use in our
packaging is Forest Stewardship Council
(FSC) or Programme for the Endorsement
of Forest Certification (PEFC) certified,
and 100% of our palm is Roundtable for
Sustainable Palm Oil (RSPO) certified.
As early adopters to the Food and Drink
Federation’s (FDF) Ambition 2025 and the
Waste and Resource Action Programme’s
(WRAP) Courtauld 2025, we’ve driven
significant reduction in resource use at our
sites. 96% of our packaging is recyclable,
and 80% of our plastic packaging is now
recyclable, up from 48% in 2018 when we
joined the UK Plastics Pact as a founding
member. Our sites have sent no waste to
landfill since 2016; and we have pledged to
reduce food waste by 50% by 2030 (against
our 2017 baseline, the year we signed up
to Champions 12.3). We want to ensure
that any food that is safe to eat is made
available for human consumption and have
redistributed 750 tonnes to organisations
like FareShare or Company Shop Group.
Our #oktobeme programme has seen more
than 900 colleagues trained on Inclusion
and Diversity (I&D), to ensure Premier Foods
is a place where everyone feels welcome
(see our values and culture on pages 12
and 13). Our network of I&D ambassadors
organises well attended awareness raising
events: for example for Black History Month,
Pride and International Women’s Day. Our
Occupational Health and Wellbeing teams,
helped by a network of over 80 mental
health first aiders across all our sites, provide
support to all colleagues. We want to play
a role in developing future talent and have
trained more than 150 apprentices and
70 graduates since 2017. We have been
in the top 100 employers by Rate My
Apprenticeships for four years in a row.
An evolving landscape
It is important that our strategy enables us to effectively tackle pressing and emerging environmental, social and societal, and governance
(ESG) issues. When developing our new strategy, we performed a thorough market trends analysis, peer and competitor benchmarking, wider
sectoral, geographical and political horizon scanning, and also reviewed existing legal, regulatory and reporting requirements applicable to our
business, to understand the challenges facing the food industry now, and in the future (see key issues below). As we - industry, policy makers,
non-governmental organisations (NGOs), scientists and citizens alike - all understand the issues better, the need for bolder and faster action
becomes clearer.
Our approach
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 26
Listening to our stakeholders: the materiality assessment process
Working with independent sustainability experts from the food industry, we embarked on a materiality assessment, with the aim to
identify and prioritise the issues most relevant to our business and to understand and reflect the views of our stakeholders, incorporating
sustainability risks into our existing risk management framework. We’ve conducted more than twenty in-depth interviews with our
customers, members of our investor community, NGOs, policy experts, and our colleagues (see summary table below). The whole process
culminated with the launch of our Enriching Life Plan in October 2021.
Industry issues What we’ve heard – example comments
Where it sits in our
strengthened ESG strategy
Climate Change
“ Net Zero - we’re focused on scope 1 and 2 for 2040 ......... The
big part of our footprint is scope 3. There will be a scope
3 emissions reduction target to 2030 in line with SBTI and Paris.”
Customer
Planet pillar – Contributing
to a healthier planet
Healthy diets
(including sugar, salt and fat)
“ We expect brands to be making a positive contribution to health
and wellbeing - be part of voluntary efforts to reformulate/divest
brands.”
NGO
Product pillar –
Making nutritious and
sustainable food
Sustainable packaging and
the circular economy
“Plastic is front and centre of shoppers’ minds.”
Customer
Product pillar –
Making nutritious and
sustainable food
Health, Safety
and Wellbeing
“ Staff practices is an issue for the sector. Factory visits have given
me confidence in Premier Food’s approach.”
Investor
Baked-in behaviours
Employee engagement,
Diversity and Inclusion
“ Inclusion, race, gender etc. I’d expect this to be mentioned on any
overall ESG plan. A lot of the communities you work with would
have particular needs. I’d like to apply a diverse lens to this.”
NGO
People pillar – Nourishing
the lives of our colleagues
and communities
Sustainable agricultural
systems (including
deforestation, biodiversity
and water management)
“ Agriculture and food are part of the next set of urgent climate
priorities, together with the impact of farming on the natural
environment and biodiversity.”
NGO
Planet pillar – Contributing
to a healthier planet
Animal welfare
“ Where there is meat – sourcing humanely treated animal
products throughout your supply chain.”
NGO
Baked-In behaviours
Sustainable proteins and
plant-based diets
“ Science says to deliver on Paris, we have to halve meat and dairy
consumption per capita. That’s the challenge you have to take
on. Really engaging with consumers and wanting the consumer
to want it.”
NGO
Product pillar –
Making nutritious and
sustainable food
Communities and
Food poverty
“ COVID has changed things. About half the population are
massively struggling to put food on the table. Some places in
the UK need more support than others. It’s about understanding
need.”
NGO
People pillar – Nourishing
the lives of our colleagues
and communities
Human Rights
“ Ethical issues and slave labour – check that you’re not doing
wrong and have your house in order.”
NGO
Baked-In behaviours
Product safety
and quality
“ Ensuring that there’s responsibility around the sourcing, the food
safety, the quality control.”
Investor
Baked-In behaviours
Food waste
“ Food waste is more important than ever. And linked to the
health agenda and environment.”
NGO
Planet pillar – Contributing
to a healthier planet
Talent and people
development
“ We know we are going to need more skilled people, where are
they coming from?”
Colleague
People pillar – Nourishing
the lives of our colleagues
and communities
Premier Foods plc
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Our approach CONTINUED
Our role and our targets
Our Enriching Life Plan sets out our
contribution to the United Nations
Sustainable Development Goals (UNSDGs).
When setting our targets, we aimed to
align our ambition with leading groups
and platforms for collaboration and action
so as to ensure our impact is maximised,
joining forces with other organisations to
help shape a more sustainable food system
for all. Already members of many industry-
leading groups; working on issues like
health, packaging or food waste (like WRAP
or the Consumers Goods Forum), we took
this opportunity to expand our reach and
challenge our vision further. For example,
we signed up to Business Ambition for
1.5°C, joining businesses aligning their
carbon reduction plans to the Paris Climate
Change Agreement, to limit global warming
to 1.5°C. We also joined Business in the
Community and Business for Social Impact,
striving to set the clearest and most
ambitious targets we could for the People
pillar, where impact can be more difficult to
measure.
Our Governance and
reporting approach
We believe everyone at Premier Foods
plays a part in delivering our Enriching Life
Plan. ESG lives at all levels of the business:
from our Board who has oversight of our
strategy and of our climate related and
other ESG risks, through to our ESG Working
Groups who report into our ESG Governance
Committee, and our networks of passionate
colleagues like the I&D Ambassadors, Green
Matters or Charity Champions, who all help
us to bring our Enriching Life Plan to life
across our business.
Our ESG Governance Committee, chaired
by our CEO and made up of relevant
members of the Executive Leadership Team
(ELT), including the CFO and new Corporate
Affairs and ESG Director, is responsible for
managing the programmes and ensuring
ESG is embedded into how we do business.
The ESG Governance Committee also
includes our new ESG Director and subject
matter experts from across the business,
representing R&D, Procurement, Scientific
and Regulatory Affairs, Human Resources
and Quality Management.
A number of cross-functional working
groups have been established to develop
and deliver specific activities, ensuring
the success of our Enriching Life Plan.
These 13 working groups feed into the
ESG Governance Committee via, a Planet
Steering Group, a People Steering Group
and the Marketing Senior Leadership
Team, which plays the role of a Product
Steering Group. Each of these Pillar
groups is sponsored by a member of our
ELT and led by a member of our Senior
Leadership Team (SLT). There is also a newly
established working group overseen by the
CFO with accountability for developing the
Company’s approach to ESG data collation
and disclosure.
The Governance structure (see below) also
ensures that climate-related and other ESG
risks are embedded in the day-to-day ways
of working of the business: a Taskforce
for Climate-related Financial Disclosures
(TCFD) steering group has been established
under the leadership of the CFO, to include
climate-related risks in our Enterprise
Risk Management process, reviewed by
the Board’s Audit Committee. See the
TCFD statement on page 36 and Risk
Management section on page 51, for more
information on our approach to climate
related risks and how ESG risks are reflected
in our risk management processes.
Holding ourselves accountable against our
targets is essential, as we seek to provide
value for all our stakeholders, and we are
committed to publishing key progress made
against our Enriching Life Plan annually. We
remain committed to sharing our data and
progress with industry platforms such as UK
Plastics Pact, Courtauld 2030, Champions
12.3 and the Carbon Disclosure Project
(CDP). More can be found in our Enriching
Life Plan Disclosure Tables on page 163.
I&D culture
Wellbeing culture
Community volunteering
Community food poverty
Development
CDRD
SBTi validation/
decarbonisation
Climate change scope 1&2
Climate change scope 3
Reducing waste
Protecting our
natural resources
Product
Packaging
Supported by networks of colleagues – Green Matters, I&D ambassadors, Charity champions
Board
Audit Committee
Enterprise Risk
Management Processes
TCFD Steering Group
ESG Governance Committee
Chair: Alex Whitehouse
Executive Leadership Team
Compliance,
Data, Reporting
& Disclosure
People Pillar
Steering Group
Planet Pillar
Steering Group
Product Pillar -
Marketing SLT
Oversight of climate-related and other ESG risks
Delivery of Enriching Life Plan
Delivery of Enriching Life Plan Embedding climate-related
and other ESG risks
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Through the materiality assessment process, we have been able to take stock of the progress
made over the years, and identified areas where the business has developed real strength and
expertise – becoming integral parts of our day-to-day practices. These “Baked-in Behaviours”
demonstrate how we continue to be a responsible business every day, and the foundations on
which our Enriching Life Plan is built.
Responsible
business practices
Definition and core topics Our policies Example measures
Putting health and safety of our
food and people first, always
Health and Safety policy LTA - 0.16
RIDDOR - 0.12
Compared to all UK manufacturing
0.22 and UK food manufacturing 0.52
Applying the highest standards
of conduct, preventing fraud,
bribery and corruption
Anti-bribery and
corruption policy
Colleague welfare and
human rights policies
Annual training to all graded colleagues on Anti-bribery and Corruption
Helping consumers make
healthier food choices, targeting
only adult audiences
Marketing to Children
Policy – Responsible
Marketing policy
95% of our portfolio carries full traffic light Front-of-pack labelling
Excellence in food quality and
provenance
Food safety and
authenticity policies
Over 100 000 tests per year at Premier Analytical Services (PAS)
All sites awarded grade A or AA+ by BRC, or specific customer standards.
Applying sound environmental
practices to continually
improve performance and the
sustainability of our operations
Environmental policy
Zero waste to landfill policy
100% of our sites are ISO 14001 accredited (see case study below)
Trading ethically, protecting
human rights, preventing child
labour and modern slavery,
promoting animal welfare
Preventing Hidden Labour
Exploitation Modern
Slavery Statements
Ethical trading Policy
Animal welfare policy
90% of all ingredient and packaging (direct) suppliers are Sedex registered
and have shared their ethical data with Premier Foods. This equates to 98%
of our direct spend.
214 audits completed over the last year (57 physical audits at supplier sites
and 157 remote, or virtual) - (see case study).
7 Sedex Members Ethical Trade (SMETA) audits conducted in the last year.
Tier 1 Business Benchmark for Farmed Animal Welfare (see case study)
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Top recognition for our work on
animal welfare
All of our sites now have ISO 14001
As part of our integration of Knighton Foods into the Premier
Foods Group, we worked together to ensure the site complies
with our foundations, our Baked-in Behaviours. In less than
twelve months, the teams have reviewed and strengthened their
Environmental Management System, which includes improved
environmental performance, enhanced compliance, pollution
prevention and resource conservation – all playing a role in
improving the sustainability of our operations, which are called out
by our “protecting the environment” baked-in behaviour. With a
successful audit in March 2022, the Staffordshire site joins all other
manufacturing sites in having obtained the ISO 14001 certification.
Driving higher ethical standards in
our supply chain
Our technical compliance team have been working with our key
onion supplier in Egypt, to drive greater ethical standards through
the supply chain. By working closely with the supplier, we have been
able to improve auditing of onion peeling stations; have set higher
standards of inspection and encouraged the supplier to provide
social and educational facilities for their employees. We visited
the facilities in January 2022, to ensure the changes and improved
standards were in place, including minimum working age. We were
able to confirm that the supplier opened a small school in a very
remote area, supporting its workers and their families. Consequently,
the supplier obtained a higher audit score, meaning they will be in a
better position in future supply tenders.
This year, we were delighted
to be awarded Tier 1 status by
the Business Benchmark on
Farm Animal Welfare (BBFAW),
in recognition of our continued
efforts to improve animal welfare
standards within our supply chain.
The BBFAW measured 150
companies against a set of
rigorous benchmarks, and
we scored particularly highly
across areas including animal
welfare management, policy
commitment, performance and
disclosure.
Our ongoing commitment to
animal welfare has included a
huge, concerted effort by our
procurement team, resulting
in our Benchmark score nearly
doubling in just five years, from
44 to 83. This is the outcome of
close collaboration with NGOs like
Compassion in World Farming,
Humane League and Four Paws
and by working in partnership with
our suppliers to establish targets
and encourage best practice for
the treatment of animals within
their supply chains. We’re not
stopping there though, and have
now signed the full Better Chicken
Commitment, to continue making
positive strides towards improved
animal welfare.
“Premier Foods should be
congratulated on achieving a Tier
1 ranking in the 2021 BBFAW
Benchmark and on receiving
a ‘B’ Impact Rating, which is
the highest rating achieved by
any company this year. The
tier ranking and impact rating
demonstrate that Premier
Foods has taken a leadership
position on farm animal welfare
and has declared improved
welfare impacts for a reasonable
proportion of animals in its
supply chain. These achievements
recognise the significant efforts
being made by the company to
drive welfare improvements and
are particularly remarkable given
the substantial tightening of the
BBFAW methodology and scoring
this year.” BBFAW Executive
Director and Managing Director
of Chronos, Nicky Amos.
Our Baked-in
Behaviours
Responsible business’ practices
Being safe
Doing the
right thing
Marketing
responsibly
Excelling in food
quality
Protecting the
environment
Sourcing
with care
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Our Products
Making nutritious and
sustainable food
Fully aligning with our commercial
and brand strategies, the product
pillar helps consumers to lead
healthier and more sustainable
lifestyles by creating foods that are
rich in nutrients, more sustainable,
and free of unnecessary or
problematic packaging.
What’s at stake?
The World Health Organisation (WHO) reports that
worldwide obesity has nearly tripled since 1975, with
1.9 billion adults overweight in 2016. In England, the
National Health Service (NHS) estimates that 28% of
the adult population was obese in 2018, and research
from the British Nutrition Foundation shows that
only 1% of the population follows a healthy, balanced
diet. To bridge this gap the WHO urges the public
and private sectors to work together to help shape
people’s choices “by making the choice of healthier
foods and regular physical activity the easiest choice”.
The EAT-Lancet Commission advocates that in
order to achieve planetary health, a dietary shift
towards healthier and more plant-based foods, a
real decrease in food loss and waste and improved
production practices are necessary, as the food
system prepares to feed a growing population in a
world of finite resources.
Packaging in the food industry is necessary to
deliver food to consumers, maintain food safety,
preserve freshness and taste, prevent food waste
and share important information with consumers.
However, if poorly designed, excessively used, or
irresponsibly disposed of, it can lead to a range of
environmental issues.
Our contribution
In keeping our consumers at the heart of everything
we do, we will strive to democratize good, nutritious
food and nudge society towards more sustainable
foods. Having launched more than 40 innovative,
better-for-you options, we will build on our track
record of bringing healthier products to market,
and work to double our sales of more nutritious
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products. We will give our consumers great tasting
products which provide additional nutritional benefits
such as fibre, protein or fruits and vegetables. We
have this year launched several healthier alternatives,
including, Paxo Low Salt Sage & Onion stuffing
mix, which contains 70% less salt than a standard
equivalent, Saxa SO-LOW Reduced Sodium Fine Sea
Salt which is 25% lower sodium and Homepride Mac
‘N’ Cheese Pasta Bake, 30% fat reduced and low
in sugar.
Harnessing the power of our trusted brands, we
will also support our consumers’ transition towards
more plant-based diets, by ensuring that each of
our core range offers a plant-based alternative, and
launching exciting new plant-based ranges in growing
categories. We aim to grow our sales of plant-based
products to more than £250m per year. We have
already launched Sharwood’s Deliciously Vegan
Indian sauces, the first vegan Indian Tikka and Korma
cooking sauces in market, and Paxo Veggie Fillers,
which are also a source of fibre and are low in fat,
saturated fats and sugar.
Packaging plays a role in delivering safe products to
consumers, but we also recognise the need to reduce
its social and environmental impacts. We will support
the recycling and recovery of our packaging and work
with industry partners to embrace new technologies
and campaigns, to help drive behaviour change.
Building on our commitment as a founding member
of the UK Plastics Pact; to ensure 100% of our plastics
packaging is recyclable by 2025, we have expanded
our targets to cover all types of packaging. Supporting
a circular economy, currently 96% of all our packaging
and 80% of our plastics packaging is recyclable. We
also work to include more recycled content material
to reduce the need for virgin materials. All of our
packaging will continue to carry OPRL (On Pack
Recycling Labels) to help our consumers navigate
a complicated recycling infrastructure, and we will
engage with industry and Government to make sure
the planned reforms to the household recycling
systems in the UK lead to increased recycling rates
and reduced littering. We will also ensure our work
on sustainable packaging is clearly contributing to our
decarbonisation commitments.
Mr Kipling Deliciously Good cakes and pies
Four years ago, we set ourselves
the challenge of creating a
cake that gave our consumers a
healthier option, without having to
compromise on taste. This year we
made that vision a reality, launching
not just one cake, but an entire
range of healthier treats under the
Mr Kipling brand.
Mr Kipling Deliciously Good is our
first range of cakes and fruit pies,
which not only score less than 4 on
the Nutrient Profiling Model (NPM),
but importantly, deliver great
flavours for consumers.
Building on the successful Mr
Kipling 30% less sugar Angel,
Chocolate and Lemon slices, our
bakeries and in-house development
chefs built on the expertise
and experience garnered from
producing such an iconic brand
over the last 50 years, to make the
impossible possible - a great-tasting
cake that contains significantly
less sugar, saturated fats and salt,
is classified as non-HFSS (i.e. not
containing high levels of fat, salt
and sugar) and contains added real
fruits.
This culinary breakthrough is a
fantastic example of our expert
development chefs continuing to
push boundaries to innovate and
create even healthier recipes of
consumers’ favourites.
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Banging the drum of the circular economy
This year, we have reduced the
height of Bisto drums by 8mm,
which will save 40 tonnes of
paper annually. The reduction
required significant changes to our
manufacturing line in Worksop,
including replacing the sensors and
making alterations to the drum’s
sealing and capping machines, all
while ensuring the serve size wasn’t
reduced. Consumers have actually
received an additional 20g of gravy
granules (190g) – approximately
six more portions per tub. The
height difference also allows for
more products to be packed in
one lorry, ultimately reducing road
miles. In Knighton, we invested
in a new line which enabled us to
make our Marvel, Smash and Birds
drums from a single material to
making it easier for consumers to
recycle them.
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Our ambitions
Our 2030 targets
Making
nutritious and
sustainable food
Make great-tasting, healthier
and more nutritious food
More than double sales of products that meet high nutritional
standards.
More than 50% of our products (by SKUs) provide additional health or
nutrition benefits.
Support the nation’s shift
towards plant-based diets
£250m sales in plant-based products made to a vegan recipe.
Each core range has a plant-based offering.
Reduce the environmental
impact of our packaging
100% of packaging to be reusable, recyclable or compostable by 2025.
Reduce carbon impact of our packaging by 25% in line with our SBTi
targets.
Sources include: World Health Organisation, British Nutrition Foundation and the Food Planet Health report by the EAT-Lancet Commission
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Sources include: World Health Organisation, British Nutrition Foundation and the Food Planet Health report by the EAT-Lancet Commission
With strengthened commitments
on tackling climate change and
deforestation, improving the
sustainability of farming practices
and reducing waste, the planet pillar
of our Enriching Life Plan contributes
to a healthier planet, by placing
sustainability at the heart of our
operations and nurturing the natural
resources that we rely on to make
our food.
What’s at stake?
“Climate change is the defining issue of our time,
and we are at a defining moment. From shifting
weather patterns that threaten food production, to
rising sea levels that increase the risk of catastrophic
flooding, the impacts of climate change are global
in scope and unprecedented in scale” (United
Nations). Around 30% of the GHG emissions globally
are attributable to the food system – encompassing
agriculture and land use, processing and transport,
through to consumption and food waste. Poorly
planned expansion of the food systems is also putting
further strains on our fragile ecosystems, putting at
risk the very systems on which industry relies. The
prominent role the food industry can play in helping
the food system transition to a more sustainable,
resilient one by collaborating with the public sector,
was highlighted by Henry Dimbleby’s National Food
Strategy, and all the main trade bodies representing
the industry are active in helping to map out a more
sustainable future.
Our contribution
Our plan recognises the environmental impact of
our operations and wider value chain. Therefore, we
will step-up our commitments to limiting the effects
of climate change, developing resilience to climate
change (see TCFD statement on page 36), to protect
natural resources through our supply chain and to
strengthen our efforts on tackling food waste.
Our Planet
Contributing to a
healthier planet
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We understand the need to act quickly and transform
our ways of working, and have answered the call
from the United Nations to the business community
to set bold and ambitious targets, joining ‘Business
Ambition for 1.5C°’. We have set strong short-term
targets: reducing our direct emissions (scopes 1
and 2) by 42% by 2030 and our indirect emissions
(scope 3) by 25% over the same period. We know we
can’t stop there and will target net zero by 2040 in
our own operations and by 2050 in our wider supply
chain. To ensure our work stays in line with the latest
science, we will validate our targets with the Science-
Based Target initiative. With complex supply chains
and operations, an essential step for the business is to
understand our full, detailed greenhouse gas (GHG)
footprint (see case study). We are also working to
refine our understanding of energy usage at sites, and
will be rolling out a smart metering system which will
further inform our plans.
We all need to protect the natural resources on which
we depend. We will therefore tackle deforestation in
the products we source which carry the greatest risks:
palm, soy, meat, pulp and cocoa. We will continue
our work with the Roundtable on Sustainable Palm
Oil (RSPO) and the Round Table on Responsible Soy
(RTRS) to drive supply of sustainable commodities.
Closer to home, we’ll work with our suppliers to
make best use of available resources like water,
and to increase biodiversity, carbon capture and
restoring natural habitats – we call this regenerative
agriculture. We will support the farmers we work
with, in their own transition, as the efforts to protect
our natural habitats rely on the supply chain acting
together.
Our sites have sent no waste to landfill since 2016,
and as signatories to the Food Waste Reduction
Roadmap and Champions 12.3, we have long
worked on reducing food waste in our operations
but we want to do even more. We’ll work with our
suppliers and partners to reduce food waste too,
and strengthen our work with food redistribution
charities to ensure leftover food that is safe to eat,
goes to human consumption wherever possible.
Moreover, our brands will harness their unique
opportunity to help our consumers reduce their own
food waste at home.
Our ambitions
Our 2030 targets
Contributing
to a healthier
planet
Taking action on
climate change
Develop validated Science-Based targets aligned to “Business Ambition for 1.5°C”
Reduce scope 1 and 2 emissions by 42% from our direct operations and achieve net zero
by 2040.
Reduce scope 3 emissions by 25% and target net zero by 2050.
Protecting our
natural resources
Zero deforestation in palm and meat supply chain by 2025, and across entire supply chain
by 2030.
Champion regenerative agricultural practices for key ingredients.
Reducing waste
across our
value chain
Halve our food waste and support our suppliers to do the same.
Make better use of food waste we do generate and redistribute 750t for human consumption
each year.
Use the strength of our brands to engage shoppers and consumers to reduce food waste
in the home.
Understanding our first full GHG Footprint
Understanding our full carbon
footprint, and that of all the
ingredients we use, is an essential
step in building the detailed
plans we need to meet our bold
decarbonisation targets. Building on
our previous work on scopes 1 and
2, we embarked on a new exercise
to map our scope 3 emissions.
We started with a full inventory of
all purchased goods and services
across our business, and worked
with a specialist consultant to
develop the best possible emissions
estimates using reputable sources,
such as Ecoinvent 3.8, BEIS 2020
and 2021, Agri-footprint, and
WFLDB (World Food LCA Database).
The outcome of the exercise will
help us to refine our measurement
approach, and most importantly
focus improvement opportunities
and help track our progress. It
will also form the foundation of
the targets we will submit for
validation to the Science Based
Targets initiative over the coming
months. As is the case with many
food and drink manufacturing
companies, a significant part of
our total environmental impact sits
outside our walls, with around 95%
of our carbon footprint being in the
products and services we purchase.
This demonstrate the importance
of collaborating with key suppliers
in order to achieve our targets.
More information on our emissions
can be found in the statutory
information section on page 97 and
Enriching Life Plan Disclosure Tables
on page 163.
Supporting our local environments
Our Green Matters champions
across our sites, have been busy
partnering with local charities and
community groups to help protect
and restore local natural habitats,
and create new ones for biodiversity
to thrive. In Carlton, colleagues
have taken 11 days out to help plant
more than 19,000, carefully selected
broadleaved and coniferous native
woodland trees, at 11 local sites in
support of Wakefield and Barnsley
councils’ efforts to adapt to climate
change and connect communities
back with nature. In Ashford,
working with the Kent Wildlife Trust,
colleagues have identified some
suitable land near the neighbouring
River Stour to convert into a pond,
where they hope to attract smooth
newts, diving beetles and dragonfly
nymphs back into the area. These
will also be spaces for colleagues to
take time out for their well-being
and connect back with nature.
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In Our People pillar, we will be
building the culture, skills and
capabilities needed to help the
business, the UK food sector and
wider economy thrive in the future,
and give back to the communities
where we operate.
What’s at stake?
The Equality Act 2010 legally protects people from
discrimination in the workplace, however, the UK
gender pay gap persists, people from an ethnic
minority background only make up 10% of the
workforce and in 2018, a third of LGBT+ staff reported
hiding their sexuality at work. The moral case for
building more inclusive workplaces is indisputable,
and indeed, so is the business case, as diversity
enhances performance. Everyone stands to benefit
when we value and support people with different
backgrounds, experiences and identities.
In its Levelling Up White Paper, the Government
recognises that “while talent is spread equally across
our country, opportunity is not”. With 500,000
vacancies in the food supply chain, the food industry
is well placed to give that talent the chance to fulfil its
potential and provide the skills needed by industry,
which are broad and evolving.
The Covid-19 pandemic has shone a new light
on the challenges faced across communities and
the role businesses can play. Post-pandemic, the
Food Foundation’s Food Insecurity survey, shows
food poverty and insecurity is on the rise with the
number of households declared in a situation of food
insecurity increasing from 7.3% in 2021 to 8.8% in
February 2022.
Our contribution
Our plan places our values first and inspires
us to do the right thing for our colleagues and
communities. We believe we all deserve the
opportunity to develop our skills and talents to
our full potential, work in a safe, supportive and
inclusive environment, and be fairly rewarded and
Our People
Nourishing the lives of our
colleagues and communities
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recognised. We want our colleagues to thrive at
work and aim for Premier Foods to be a place where
everyone is welcome, feeling they can bring their
true, authentic self to work every day (for more on
our values and culture see pages 12 and 13). We
are working towards more inclusivity at all levels,
from bringing gender balance in senior leadership
roles, to reflecting the diversity of the different
communities where we operate, and will continue to
educate all colleagues on the importance of this. We
are also creating a culture which supports colleagues
with their mental and physical health and wellbeing.
We have already trained 91% of managers on mental
health awareness, and will roll it out to all of our
colleagues – having already trained 1,500.
With the food industry constantly reinventing itself,
and the skills and expertise required ever evolving,
we will aim to be a leading developer of people
for the UK food industry. Expanding our successful
apprentice and graduate programmes, we will work
with schools and colleges in our local communities,
to inspire careers by offering on-the-job experience
for students as part of the new T- levels placements,
and will develop specific programmes for excluded
groups. We want to help the food industry bridge
the gap on STEM skills and will give special focus to
offering training and development to our colleagues,
current and future.
We operate from 15 offices and sites across the
country, and endeavour to be a caring partner for
our colleagues, their friends and families and other
members of our communities, our customers,
suppliers and future colleagues. We’ll aim to be a
force for good and volunteer our time and expertise
to those local causes linked to the issues of food
poverty, skills development, employability and local
environmental quality. As a food manufacturer we
feel a responsibility to help tackle the increasing
issue of food poverty and will work together with
our partners, suppliers, customers and charities to
donate the equivalent of 1 million meals to those
vulnerable populations. This year, we innovated
with a Tesco in-store activation “Win a dinner, Give a
dinner” which enabled a donation of nearly £30,000
and 30 pallets worth of products to FareShare.
Our ambitions Our 2030 targets
Nourishing
the lives
of our
colleagues
and
communities
A diverse, healthy
and inclusive
culture
Gender balance for senior management.
Diversity KPIs to reflect regional demographic.
All sites achieve platinum level Health and Wellbeing accreditation.
A leading
developer of
people
Provide skills programmes and work opportunities for the young and excluded groups.
75% of STEM vacancies filled by internal candidates.
80% colleagues feel they have opportunity to develop and grow.
A caring
community
partner
Donate 1 million meals per year to those in food poverty.
Be more of a force for good in our communities by volunteering at least 1,000 colleague
days each year.
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Supporting our communities
During the pandemic many
traditional face-to-face fundraising
events were not possible, so
our charity champions worked
especially hard to help colleagues
fundraise in innovative ways for our
charity partner Together for Short
Lives. That’s why we’re incredibly
proud to have raised a fantastic
£108,000 this year, to support the
15 local children’s hospices with
which our sites are partnered,
funding over 800 community care
sessions for children, giving families
precious moments together and,
allowing parents of children with
life limiting conditions, the rare
opportunity to just be mum and
dad. This brings our fundraising
total for this wonderful charity to
£188,000 in April 2022, well on
track to achieving the £200,000
target we set ourselves at the
beginning of our partnership in May
2020. As a responsible business,
we’ve also sought to respond to
crises affecting our colleagues,
wider communities and partners,
and this year made a donation of
£100,000 to the British Red Cross
through the Disasters Emergency
Committee Ukraine Humanitarian
Appeal, to support the people of
Ukraine. The donation will help
provide much needed clean water,
emergency shelter, food, health
assistance, sanitation and hygiene,
protection and trauma counselling.
C
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Encouraging Women in STEM careers
With women occupying less than
30% of the Science, Technology,
Engineering or Maths (STEM)
roles, we want to raise awareness
of the exciting opportunities the
food industry offers, and support
younger women as they choose
this career path. We are delighted
to have talented female colleagues
taking part in our highly recognised
Apprenticeship scheme, which
each year sees between 70 and 80
colleagues training. For example,
colleagues Dani Keep, Apprentice
Packaging Technologist, Emma
Wright, Apprentice Technical
Operator on our Oxo cubes line and
Jemma Green, Food Technologist
Apprentice, recently attended
the National Skills Academy for
Food and Drink (NSAFD) Tasty
Ambassador course, building
skills to become advocates of
the food industry. They are just
three examples of our female
colleagues showing the way for
the next generation of women in
STEM roles.
Premier Foods plc
www.premierfoods.co.uk
 35
STRATEGIC REPORT
Taskforce on Climate-Related Financial
Disclosures: Climate-related disclosures
We recognise that climate change is one
of the most pressing issues for society,
and our collective response over the next
decade will determine how broad and deep
the impacts of this will be. That’s why we
must continue to work collaboratively to
make a greater positive impact. We see it
as both a responsibility and an opportunity,
to which we are committed to playing
our part.
Our new Enriching Life Plan, lays out a bold
new set of ambitions and targets, that help
address the global challenge we all face and
how we can better prepare our business to
adapt to the impacts of climate change.
In 2021 we joined the “Business Ambition
for 1.5°C ”, and have committed to
validating our targets within the framework
of the Science Based Targets initiative.
We have also established a group to lead
our work on climate change resilience
and adaptation – using the Taskforce on
Climate-Related Financial Disclosures
(TCFD) framework to help with the
structure and reporting of our work.
We are pleased to confirm that we
have included in our TCFD disclosures
the material climate-related financial
disclosures consistent with the four
recommendations and the eleven
recommended disclosures set, however,
as we align our approach to the updated
TCFD additional guidance (Implementing
the Recommendations of the Task Force
on Climate-related Financial Disclosures”
(2021 TCFD Annex)) which was released
in October 2021, there are some
recommendations in the “2021 TCFD
Annex: All Sector Guide”, that will require
more time for us to fully consider. In line
with the current Listing Rule requirements
(as referred to in Listing Rule 9.8.6R(8)),
the areas where we require more time to
implement fully, are laid out in the table
below, under future focus.
•
Governance
Purpose
Describe the Board’s oversight of climate-related risks
and opportunities.
Describe the management’s role in assessing and
managing climate-related risks and opportunities.
Our work so far
A new TCFD steering group, under the control of the ESG Governance Committee,
has been established to embed the TCFD framework across the business and
is being advised by specialist independent consultants and assisted by climate
change advisors. Governance and risk processes have been reviewed to clarify
accountability for ESG and climate related risks and opportunities. Enterprise Risk
Management processes, under the control of management, have been expanded
to include the identification and management of climate related risks. In line with
the business’s Enterprise Risk Management, process climate-related and broader
ESG risks are reviewed by the Board twice a year, to ensure the effectiveness of the
process and its outcomes.
Future focus
Over the next year we will use
the TCFD Steering Group and
ESG Governance Committee to
strengthen the understanding
of management teams to better
identify and manage climate-
related risks and opportunities.
Strategy
Purpose
Describe the climate-related risks and opportunities
the organisation has identified over the short,
medium, and long term.
Describe the impact of climate related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning
Describe the reliance of the organisation’s strategy,
taking into consideration different climate related
scenarios, including a 2°C or lower scenario.
Our work so far
A broad range of climate related risks and opportunities have been identified and
prioritised based on likelihood, impact and the planning horizon where they could
impact the business. Mitigating actions are in place for key risks. An assessment
has been carried out on the resilience of our supply sites with investment at one
site to improve local flood defences. Modelling has been carried out to understand
the impact of changes in shoppers’ behaviour resulting from changing weather
patterns.
Three climate change scenarios have been identified which will be used for further
quantification of key physical and transition risks and opportunities.
Future focus
Over the next year we will carry
out further assessments to
strengthen our understanding of
the impact of our most material
risks in three climate change
scenarios. In the subsequent
year we intend to strengthen
our modelling of the impact
of a broader range of climate
related risks.
Risk management
Purpose
Describe the organisation’s processes for identifying
and assessing climate-related risks.
Describe the organisation’s processes for identifying,
assessing, and managing climate related risks
are integrated into the organisation’s overall risk
management.
Our work so far
Enterprise Risk Management process in place with responsibility to identify
emerging risks. Training has been carried out for key teams to raise awareness
of the likely impacts of climate change along with developing a new approach
to strengthen the way these risks are described, categorised, monitored and
acted upon.
Key risks are elevated onto the business’s Principal Risk register.
Future focus
Over the next year we will
further increase awareness
and understanding across
the business. Embedding and
strengthening our processes.
Metrics and Targets
Purpose
Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with
strategy and risk management process.
Disclose scope 1, scope 2, and if appropriate scope 3,
greenhouse gas (GHG) emissions, and the related risks.
Describe the targets used by the organisation to
manage climate-related risks and opportunities and
performance against targets.
Our work so far
The business has committed to Science Based climate targets and will disclose
progress annually. The business takes a value chain wide approach and the primary
decarbonisation targets are supported by contributing targets covering waste,
packaging, regenerative agriculture and haulage.
Clear accountability around the business for tracking the evolution of climate-
related risks and opportunities.
See our Enriching Life Plan Disclosure Table on page 164 for our Greenhouse Gas
emissions disclosure.
Future focus
Our decarbonisation targets will
be submitted for validation by the
Science Based Targets initiative
this year. We will use the outputs
from our risk assessments and
scenario modelling to strengthen
our use of key metrics and other
inputs to track evolving climate-
related risks and opportunities.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 36
Governance
The Board has overall oversight of our
ESG strategy, the Enriching Life Plan,
and climate-related risks. Day-to-day
responsibility for managing the delivery of
our Enriching Life Plan is delegated to our
ESG Governance Committee. See page 28).
Climate related risks are incorporated into
our Enterprise Risk Management framework.
This ensures a bottom-up approach
to identifying and quantifying risks for
prioritisation, as well as oversight through
appointed members of the Executive
Leadership Team, the Audit Committee, and
ultimately to the Board of Directors.
Climate risks are reviewed by the Audit
Committee as part of the risk management
process conducted twice a year, and
subsequently presented to the Board.
Climate risks and ESG matters are also taken
into account by the Board, when making
key decisions as part of its responsibility to
consider matters under Section 172 of the
Companies Act.
In order to support the adoption of the
framework of TCFD, a steering group has
been established to develop the approach
and raise awareness of climate related
risks around the business, and directly
update the Audit Committee. The steering
group also co-ordinates the adoption of
TCFD best practices into the Enterprise
Risk Management processes, and ensures
visibility and oversight of the programme by
the ESG Governance Committee.
Strategy
We are proud to manufacture the vast
majority of our products in our own
dedicated factories across the UK, serving a
number of commercial channels through a
range of different routes to market. These
local operations mean we can expect our
own business to be affected by the physical
and transitional impacts of climate change
in the UK. As a food manufacturer, our
business also relies on a wide range of
raw materials, ingredients and packaging
items and, whilst much of this is locally
sourced, there are a number of complex
international supply chains, which are likely
to also be impacted by the global effects
of climate change. We, like others, will
therefore need to prepare our business
for a range of physical and transitional
effects of climate change, both locally and
internationally, which will represent both
risks and opportunities for the organisation
over the short, medium and long-term.
Several climate related risks were already
included in the risk management processes
of the business, although this year there
has been an increased focus on identifying
and considering a broader range of possible
impacts of climate change over a longer
time period. The Internal Audit and ESG
teams have worked with teams around
the business to carry out training for key
personnel. A cross value chain workshop,
and numerous functional sessions were
held to develop a more detailed overview
of climate risks around the business.
This approach has helped refine our
understanding of the transitional and
physical risks and opportunities presented
by climate change.
The work has identified the most material
risks and opportunities based on likelihood,
impact and time horizon when the risks
become more likely. The key categories of
risk and opportunity, and our response is
shown in the table on the next page.
Board
Audit Committee
Enterprise Risk
Management Processes
TCFD Steering Group
ESG Governance Committee
Chair: Alex Whitehouse
Executive Leadership Team
Compliance,
Data, Reporting
& Disclosure
People Pillar
Steering Group
Planet Pillar
Steering Group
Product Pillar -
Marketing SLT
Oversight of climate-related and other ESG risks
Delivery of Enriching Life Plan
Delivery of Enriching Life Plan Embedding climate-related
and other ESG risks
Premier Foods plc
www.premierfoods.co.uk
 37
STRATEGIC REPORT
Taskforce on Climate-Related Financial
Disclosures: Climate-related disclosures CONTINUED
When considering the likelihood and
possible impact of the risks associated with
climate change, it is recognised that the
most significant risks we face come in the
form of the potential short-term disruption
and long-term reshaping of supply chains,
as a result of changing and more extreme
weather patterns, and the financial
costs and increased business complexity
of preparing for climate change. The
commercial implications of climate change
represents both risks and opportunities for
business growth.
An assessment of the physical risks
associated with more extreme weather
across the Group’s manufacturing sites has
been carried out in collaboration with our
insurance partners, with our Lifton site
identified as being at some risk of flooding.
As a result, investments have been made
to improve the resilience of the site. See
case study. Our Moreton site; is within an
area which is protected from one in 500
year coastal storm surges by public flood
defences, so is deemed to be at a low
risk of short to medium-term operational
impacts, but will continue to be monitored.
Other sites will be subject to temperature
and rainfall changes, but their operations
are less likely to be impacted by extreme
weather in the short to medium-term.
Our operational plans include a long-range
capital investment plan, which covers
the delivery of our Enriching Life Plan,
these include investments in improved
energy monitoring and tracking across our
manufacturing sites, to support our scope 1
and 2 decarbonisation targets.
The potential impact of shoppers’ changing
behaviour in the way they buy our seasonal
product portfolio has been considered
under a range of climate change scenarios,
looking at the impacts of warmer winters
and longer, and hotter summers. This work
is combined with a broader assessment of
consumer trends, market outlook, brand
and customer objectives and operational
plans, to form the basis of the annual
review of our strategic plans. This insight
has, in part, supported the Group’s
diversification into product adjacencies
which take our trusted brands into
categories which are consumed in more
seasons throughout the year.
As shoppers and retailers become more
aware of climate related issues and want
to adopt more sustainable products, there
are also commercial opportunities for the
business in driving growth in more
sustainable product categories. With our
retail partners also keen to demonstrate
progress in tackling climate change, there
are opportunities to cement commercial
relationships and further improve outcomes,
by demonstrating leading shopper insights
and having strong environmental credentials.
In order to better understand these risks
and opportunities, we will carry out more
detailed modelling and impact assessments
over the next year on the physical risks to
key ingredient availability, and the risks and
opportunities associated with changing
shopper and customer behaviour. In future,
we plan to expand our modelling to include
a broader range of transitional risks. The
modelling will be carried out against three
climate change scenarios; covering a range
of future states from a “worst case” which
is aligned to the RCP 8.5 (Representative
Concentrations Pathway as outlined by the
International Panel on Climate Change) to
an RCP2.6 pathway, which considers global
temperature change at less than 2°C. The
modelling of the commercial impact of
changing shoppers’ behaviours, will be
carried out by our sales and marketing
teams, given their insight into our existing
products and shoppers, with the physical
supply chain risks supported by external
independent specialists in the field.
Key risks and opportunities are shown in the table below, along with our response.
Key transition risks
Timeframe
Our response
Financial impact of increasing energy costs and
carbon pricing.
Short to Medium-term
Investments in better understanding our energy use. A range of projects
covering energy efficiency, expanding the use of renewable electricity and
decarbonisation.
Developing programmes to drive improvements in performance and
preparedness of our key suppliers.
Evolving legislation and regulation could lead to
increased business complexity and forced changes in
key operational processes.
Short to Medium-term
Monitoring and reviewing upcoming legislation, improving knowledge of
emerging technologies in key areas and investing as appropriate.
Key physical risks
Timeframe
Our response
Value chain could suffer short-term disruption due
to more extreme weather events.
Short-term
Review of risks across our sites, investment to improve flood resilience at
a key site. Developing understanding of risks in local operations and route
to market. Work is planned to quantify key commodity risks, based on
understand the resilience and preparedness of suppliers.
Quality or availability of key ingredients could be
impacted by long-term changes to the climate.
Medium to Long-term
Future work planned to understand the likely impact of climate change
on the sourcing of raw materials.
Key commercial opportunities and risks
Timeframe
Our response
Commercial opportunities to grow categories and
gain market share by supporting shoppers’ demand
for more sustainable products. Possible changes in
shoppers’ buying patterns in the event of weather
patterns changing.
Short-term
Brand plans, reflecting commercial opportunities for more sustainable
products, including meat and dairy free categories, and more sustainable
packaging.
Developing products and commercial strategies to drive demand in
warmer summers.
Commercial opportunities as our retail partners
seek to support climate action in their supply chain
(relationships, listings, commercial terms).
Short-term
Customer engagement plans seeking to strengthen relationships with key
customers, and demonstrate how activities are supporting their
ESG objectives.
Short-term 0 – 5 years Medium-term 5 – 15 years Long-term – more than 15 years
Timeframe
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 38
Risk management
Climate related risks are managed
through our established Enterprise Risk
Management framework to identify, assess,
mitigate and monitor the key risks we
face as a business. The risk management
framework is used to inform our principal,
watchlist and emerging risks. The risk
management framework incorporates
both a top-down approach to identify the
Group’s principal risks and a bottom-up
approach to identify specific operational
risks. The ELT is responsible for identifying,
managing and monitoring the principal
risks, which includes climate change. The
Board, (where our CEO represents the ESG
Governance Committee) is accountable
for the overall risk management process,
and determining the effectiveness of the
Executive team’s risk management strategy.
This process applies to climate related
risks, alongside all other ESG and broader
business risks. Our Internal Audit and
ESG teams work closely to update our
principal risks as they relate to climate
change. We have taken several steps to
more formally integrate the identification
of climate-related risks into our existing
risk management framework. See our risk
management section on page 51 for more
information.
Identify
The list of potential risks and opportunities
are evaluated, by assessing their likelihood
and impact using our risk management
framework. This materiality assessment
is conducted on a bi-annual basis, to
ensure the implications of all risks and
opportunities are appropriately understood
in the context of the changing business,
legislative and physical environment. We
update the risk scores as necessary due
to changing circumstances, or, as and
when data or modelling for these risks and
opportunities are refined.
The business units now use a broad set
of sources to identify and understand
potential climate-related risks and
opportunities:
• Climate change publications and data.
• Emerging industry and academic
reports.
• Membership of collaborative groups
such as WRAP, Consumer Good Forum
and Science Based Targets initiative.
• TCFD guidance on potential risks and
opportunities.
• Key external groups such as suppliers
and specialist consultants.
• Internal cross-functional risk
management workshops.
Measure
The impacts of climate change will
vary over time, and will depend on the
success of actions we collectively take to
limit climate change in future years. We
therefore use three time horizons (short -
up to 5 years, medium - up to 15 years, and
long - beyond 15 years), to help understand
the likely time when risks will impact our
business and how they may change over
time. We use external datasets on climate
drivers and internal datasets on our
business activities to model a timeseries
for the potential financial impact of
material risks under each scenario between
2022 and 2050. Our measurement of the
identified risks will be strengthened by
our more detailed modelling and scenario
analysis next year.
Respond
Response strategies are developed
for the key risks identified across the
business. We use this to define controls
and monitor metrics. This will ensure that
the appropriate decisions on mitigating,
transferring, accepting or controlling the
climate-related risks are made.
Monitor and report
All key risks are reviewed on a bi-annual
basis to assess and understand the
evolution of the risk and whether our
current risk management controls are
sufficient. Outputs of this work is then
included in the Risk Management sections
of each annual report.
C
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The Lifton Creamery, in the beautiful Lyd Valley
in Devon, opened in 1917 and is home to the
Ambrosia range of products. The site’s location
and the success of the brand ,owes much to the
wonderful milk produced in the West Country.
The river Lyd rises in the Dartmoor national
park, and runs along the southern boundary of
the creamery. The site was identified as being at
an increasing flooding risk in a comprehensive
physical risk assessment carried out across all
Premier Foods’ key manufacturing sites with our
insurance partners. A full topographical survey
was carried out to understand possible flooding
scenarios and the impact which could be expected
across the site in a range of scenarios. Most of
the site, and its infrastructure, could be quickly
recovered in the event of flooding, however,
several key electrical panels are in areas which
could be subject to water damage and would be
more susceptible to major failure in the event
of water damage. A comprehensive assessment
was carried out to understand the options to
protect these key items, either by changing their
locations, or putting in place permanent flood
doors or quickly deployable flood protection
barriers. Investments were made through 2021
and 2022, along with the development of a local
flood emergency response plan, in order to define
when the flood protection measures should be
deployed. These new processes have become part
of the site’s ongoing procedures and is included in
local training programmes. This work will protect
key site infrastructure from flooding up to 200mm
above the level expected in a one in 500-year
event, reducing the risk of asset damage and
significant downtime.
Protecting sites from the physical risks of climate change
Premier Foods plc
www.premierfoods.co.uk
 39
STRATEGIC REPORT
Metrics and targets
Our new Enriching Life Plan was built
following a broad, and deep exercise to
capture insights and perspectives from
a wide range of stakeholders, including
NGO’s and specialist groups, customers,
employees and investors. The plan sets
bold new targets for the business, in the
way it supports great tasting, nutritious and
sustainable diets; contributes to a healthier
planet; and nourishes the lives of our
colleagues and communities.
New environmental commitments include
decarbonisation targets, aligned to the
“Business Ambition for 1.5°C”, aiming
for a 42% reduction in scopes 1 & 2
emissions between 2020 and 2030, and
a reduction of 25% in scope 3 emissions
over the same period of time. We have
set target dates to achieve net zero in our
own operations by 2040 and across our
whole value chain by 2050. The Enriching
Life Plan Disclosure Tables on page 164,
show our current disclosures and annual
disclosure approach, which is aligned to
the GHG protocol and Science Based Target
initiative. These headline targets will be
supported by contributing targets covering
waste, packaging, regenerative agriculture
and haulage, also shown in our Enriching
Life Plan on page 28 and our Disclosure
Tables from page 163. Progress against
these targets, will in itself provide strong
mitigation actions for some of the financial,
commercial and transition risks identified
by climate change across the business. The
metrics we are using to measure and track
progress on our broader Enriching Life Plan
will therefore be important in helping us
understand how specific climate risks are
evolving.
These actions will not, however, directly
impact other physical climate related risks
the business faces, and other key factors
will be tracked in order to understand the
evolving risk and opportunity landscapes.
Key transition risks Factors helping us track evolution
Financial impact of increasing energy costs and carbon pricing. • Procurement team monitoring energy market.
• Public Affairs and ESG teams monitoring legislative landscape.
• Site Energy Committees tracking energy use.
Evolving legislation and regulation could lead to increased
business complexity and forced changes in key operational
processes.
• Public Affairs and ESG teams monitoring legislative landscape.
• Engineering and site facilities teams monitoring evolving
technology and evolving local environmental issues.
Key physical risks Factors helping us track evolution
Value chain could suffer short-term disruption due to more
extreme weather events.
• Procurement team monitoring availability and market
dynamics on ingredients and reviewing preparedness plans of
key suppliers.
• Factory Managers and Logistics functions monitoring local
weather trends and pressure points in key local infrastructure.
Quality or availability of key ingredients could be impacted by
long-term changes to the climate.
• Procurement team monitoring availability and market dynamics
on key ingredients, reviewing preparedness plans of key suppliers
and tracking emergence of new suppliers, or changing supply
regions.
Key commercial opportunities and risks Factors helping us track evolution
Commercial opportunities to grow categories and gain share by
supporting shoppers’ demand for more sustainable products.
• Brand teams ongoing review of shopper sentiment on climate
related issues.
Commercial opportunities as customers seek to support action in
their supply chain (relationships, listings, commercial terms.)
• Customer teams ongoing review of the targets and
commitments of customers.
Next steps
During the 2022/23 financial year we
will embed our better understanding of
climate risks and the recommendations of
the TCFD framework more fully into our
Enterprise Risk Management approach. This
will include further detailed quantification
of risks and a strengthened approach for
tracking the emergence and evolution of
risks. This will have a particular focus on the
risks and opportunities likely in the near
future and those with the most material
impact on our business. In order to improve
our understanding of the impact of key
risks and help develop a more sophisticated
approach to formalising our risk appetite in
this area, the most material risks will also
be assessed and quantified in greater detail,
based on the three scenario models already
referenced.
This approach will be supported by
additional training for key colleagues,
strengthened processes to improve
awareness and collaboration between
business teams, and the inclusion of climate
related risks and issues into functional and
individual objectives around the business.
Taskforce on Climate-Related Financial
Disclosures: Climate-related disclosures CONTINUED
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 40
Operating and financial review
Due to the unique nature of the prior year when the Group saw
exceptional patterns of demand for its products during the peak
of the Covid-19 pandemic, the Group has managed and reviewed
the performance of its business this year with reference to the
more normalised trading conditions of two years ago as well as the
prior year.
*The statutory comparative period is for the 53 weeks ended 3 April
2021. To aid comparability of results against equal time frames, the
following review for headline measures is provided on a 52 week
comparable basis and reconciliations provided to a 53 week basis
for FY20/21 can be found in the appendices on pages 49 to 50.
EBITDA is EBITDA on an adjusted basis as defined in the appendices.
Revenue
Group revenue (£m)
(52 week comparable basis) Grocery
Sweet
Treats Group
Branded
12
560.1 214.0 774.1
Non-branded
13
87.6 38.8 126.4
Total 647.7 252.8 900.5
% change vs 1 year ago*
Branded (6.9%) +7.0% (3.4%)
Non-branded (4.5%) (5.0%) (4.7%)
Total (6.6%) +5.0% (3.6%)
% change vs 2 years ago*
Branded +8.8% +12.1% +9.7%
Non-branded (9.6%) (13.0%) (10.6%)
Total +5.9% +7.3% +6.3%
(53 week comparable basis)
% change vs 1 year ago*
Branded (8.1%) +5.3% (4.7%)
Non-branded (6.1%) (5.7%) (6.0%)
Total (7.8%) +3.4% (4.9%)
Commentary versus two years ago
Group revenue increased by 6.3% compared to two years ago.
Branded
12
revenue was particularly strong, up 9.7%, while lower
margin non-branded
13
revenue declined (10.6%). In the fourth
quarter, Group revenues increased by 3.5% to £225.8m, with
branded revenue up 5.1% and non-branded revenue (7.0%) lower.
This quarter compares against the same period two years ago
when consumers began to accelerate their purchase of household
staple grocery products at the onset of the pandemic. The Group’s
branded mix accelerated to 86.0% of total sales, up 270 basis points
compared to two years ago.
The Group’s branded growth model strategy leverages the
strength of its market leading brands, launching insightful new
products, supporting them with emotionally engaging advertising
and building strategic retail partnerships. Branded revenues on
a two-year compound annual growth rate basis, have grown by
4.7%, serving to illustrate the success of this strategy and model.
Additionally, volume and value market share
14
increased by 41 and
68 basis points, respectively, compared to the same period two
years ago. Outperformance was delivered in both the Grocery and
Sweet Treats markets, by 52 and 23 basis points respectively. In
e-commerce, many consumers who turned to shopping online for
grocery products during the pandemic have continued to use this
channel. The Group’s sales through online have grown by a very
significant 71% compared to two years ago and additionally, market
share has increased by 111 basis points.
Another key element of the Group’s branded growth model is the
strength of its retailer/customer partnerships. Compared to the
prior year, the Group’s weighted average distribution points have
grown by 121 basis points; and one of the key drivers of this has
been the strength and delivery of the its innovation programme.
Grocery
Grocery revenue grew by 5.9% compared to two years ago. The
branded portfolio was the clear driver behind this growth as
revenue increased by 8.8%, with non-branded business (9.6%)
lower. Grocery revenues in the fourth quarter were marginally
lower by (0.2%), with higher margin brands delivering growth
of 0.9%, as volumes spiked two years ago at the onset of the
pandemic. This was offset by a (6.9%) decline in lower margin non-
branded revenue due to lower out of home volumes.
The majority of the Group’s Grocery brands grew revenues in
FY21/22 compared to the same period two years ago. Brands
such as Batchelors, Bisto, Sharwood’s, Paxo and Angel Delight all
grew well above the category averages and many of these have
benefitted from sustained levels of consumer marketing investment
and new product development programmes.
A major success for the Group has been the Nissin noodle product
ranges. The Nissin brand has grown consistently strongly over the
last four years; revenues this year grew by nearly 130% compared
to the same period two years ago. During the year, Nissin noodles
became the market leader in the authentic snack pot market,
having grown market share from 16% in 2017 to 48% today.
The Group continues to bring more healthy product ranges to
market such as Loyd Grossman 30% less sugar Lasagne sauces, no
added sugar Homepride pasta bakes, Oxo meat-free Chicken flavour
stock cubes and Angel Delight ready to eat, on the go, low calorie
dessert pots. In FY22/23, the Group will be launching a series of
exciting new better-for-you products such as Bisto Best meat-free
gravy, Sharwood’s lower fat Poppodoms and Popped Crackers and
Paxo low salt stuffing.
One of the Group’s strategic pillars is expanding into adjacent
categories, leveraging the strength of the Group’s branded equities’
and significant progress was delivered in the year. This year, major
launches included Oxo Rubs and Marinades, representing Oxo’s
first major move beyond its heartland of stock; the extension of the
Mr Kipling, Ambrosia and Angel Delight brands into the Ice-cream
category with initial sales over £1m while Cape Herb & Spice, the
product range of rubs, chilli and seasonings has achieved increased
distribution.
Trading profit, Adjusted PBT and earnings
per share were ahead of previously raised
expectations, with strong branded growth
driving market share gains.”
Duncan Leggett
Chief Financial Officer
Premier Foods plc
www.premierfoods.co.uk
 41
STRATEGIC REPORT
Sweet Treats
Sweet Treats delivered strong revenue growth of 7.3% in the year
when compared to two years ago, driven by particularly high
branded growth, up 12.1% to £214.0m. This was partly offset by
non-branded revenue which declined by (13.0%) following exit of
lower margin contracts. During the fourth quarter, Sweet Treats
revenue increased by 15.4%, reflecting strong branded sales, which
grew 17.7%.
The branded performance was as a result of the particularly strong
innovation programme. Consumer uptake from the new better-
for-you Mr Kipling 30% less sugar Viennese Whirls was strong,
while the premium Mr Kipling Signature products such as Deluxe
Millionaire Whirls also performed very well. Cadbury cake delivered
strong growth through the year, well supported by innovation
and investment in Mr Kipling continued in FY21/22 with further
advertising to come next year.
As outlined above, one of the Group’s strategies is to expand into
new, adjacent, categories, leveraging its brands’ equities. Mr Kipling
entered the biscuit category for the first time in the second half of
the year with a range of new biscuits targeting the everyday treat
occasion.
Looking ahead to the coming year, the Group has recently
announced the launch of Mr Kipling Deliciously Good cakes. This
ground breaking new range is a clear demonstration of delivering
against the Group’s ‘Enriching Life Plan’ ESG strategy, offering
consumers further healthier options to support healthier lifestyles.
These new cakes, which come in seven different variants, are made
with higher levels of fibre and fruit compared with the standard Mr
Kipling range and are classified as non-HFSS under UK government
guidelines.
International
In the International business, revenue on a constant currency
basis was 25%
8
higher than the same period two years ago, with
growth in all target markets. In Ireland, application of the branded
growth model strategy saw further new product development and
television advertising. The business entered the Quick Meals Snack
& Soups and Homebaking categories and launched the Mr Kipling
premium Signature range of cakes. Revenues in Australia grew
double digits, reflecting higher sales of Mr Kipling and Cadbury
cake, which between them, hold a 14% share of the cake category
and remain market leaders.
The Group continues to make strategic progress as it applies its
brand building capabilities and executional focus in its priority
markets of Ireland, North America, Australia and Europe. For
example, Mr Kipling snack pack cake slices in Canada are now in
wider distribution, following a successful trial and after refinement
of the product proposition. A similar approach is being taken in the
USA, with a test trial to validate the approach which commenced
at the start of FY22/23. Also in the USA, Sharwood’s continues to
increase distribution in a key retailer reflecting both increased store
presence and new product listings.
Europe is increasingly becoming a clear opportunity for the Group,
with Sharwood’s in particular demonstrating strong growth in
both Spain and Germany during the year. In Spain, revenue of
Sharwood’s cooking sauces has increased by nearly 100% compared
to two years ago, reflecting strong growth in Indian sauces such
as Tikka Masala while sales in Germany have grown due to the
popularity of Sharwood’s Rice pots.
Non-branded
Non-branded revenue was (10.6%) lower than the same period two
years ago. In Grocery, retailer non-branded revenue grew, while
some out of home volumes remain below pre-pandemic levels,
some parts of this business have now returned to growth on a one
year basis. Sweet Treats non-branded revenue was impacted by
lower margin contract exits in pies and slices.
Commentary versus prior year
The commentary in the following section is made by comparison to
the 52 weeks ended 3 April 2021, unless otherwise stated
Group revenue for the 52 weeks to 2 April 2022 was £900.5m, a
decrease of (3.6%) on the same period a year ago when volumes
were inflated by more meals being eaten at home due to
restrictions on out of home eating. Branded revenue was (3.4%)
lower at £774.1m while non-branded revenue declined (4.7%) to
£126.4m. In the fourth quarter, Group revenues were (0.5%) lower
at £225.8m, with branded revenue down (1.8%) and non-branded
revenue up 10.5%. The fourth quarter last year saw pandemic
lockdown restrictions in place, with less out of home hospitality
open to consumers and therefore a greater prevalence of eating
in home.
When the year’s results are compared to the statutory comparative
of 53 weeks ended 3 April 2021, revenue was (4.9%) lower than the
prior year. Grocery Revenue declined by (7.8%) while Sweet Treats
grew by 3.4%. Branded revenue declined by (4.7%) while non-
branded revenue was (6.0%) lower.
Grocery
As expected, Grocery revenue was lower in FY21/22 compared
to the prior year. Branded and non-branded revenue declined by
(6.9%) and (4.5%) respectively, reflecting the exceptional volumes
experienced in the prior year due to the elevated consumer
demand observed in the Group’s grocery categories during the
peaks of the Covid pandemic. During the course of the year,
the strongest comparatives were seen in the first quarter when
lockdown restrictions were at their most stringent.
Operating and financial review CONTINUED
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 42
Sweet Treats
In Sweet Treats, revenue grew by 5.0% in the year to £252.8m. The
branded part of the business grew strongly, as revenue grew by
7.0% to £214.0m, while non-branded revenue was (5.0%) lower at
£38.8m. In FY20/21, the cake category did not experience the same
level of elevated volumes compared to that seen in the Group’s
grocery categories, as consumers focused on purchasing key
household staple products as the UK entered lockdown restrictions.
The delivery of the Sweet Treats branded revenue profile is
attributable to the Group’s proven branded growth model,
including the strength of the new product development programme
and sustained marketing investment, as outlined above.
International
The International business saw revenue grow by 2%
8
on a constant
currency basis. In a similar vein to the Grocery business in the UK,
revenue in the first half of the year compared to the prior period
was impacted by the effects of the global pandemic. In particular,
grocery product ranges in the majority of overseas markets saw
lower sales due to more meals eaten at home during lockdown
restrictions in the prior year, as was the case in the UK.
Non-branded
Grocery non-branded sales were (4.5%) lower in the year due to
lower sales at Knighton Foods partly offset by higher sales at the
Group’s frozen pizza base business, Charnwood Foods. In Sweet
Treats, revenue declined by (5.0%) which was due to the impact of
contract exits in fruit pies and slices ranges.
The Group’s non-branded business plays a secondary, supportive
role which includes assisting the recovery of manufacturing
overheads; applying strict financial hurdles on new contracts while
deploying low levels of capital investment and protecting branded
intellectual property.
Trading profit
£m
FY21/22
(52 weeks)
FY20/21*
(52 weeks)
Change vs
1 year ago*
Change vs
2 years ago*
FY20/21*
(53 weeks)
Divisional contribution
2
Grocery 160.2 172.5 (7.1%) +8.1% 174.7
Sweet Treats 33.4 22.4 +49.6% +41.0% 23.2
Total 193.6 194.9 (0.6%) +12.7% 197.9
Group & corporate costs (45.3) (46.6) +2.7% (15.4%) (46.6)
Trading profit 148.3 148.3 0.0% +11.9% 151.3
Commentary versus two years ago
The Group delivered a very strong performance at Divisional
contribution and Trading profit compared to two years ago. Trading
profit rose by 11.9% to £148.3m as Grocery and Sweet Treats
Divisional contribution grew by 8.1% and 41.0% respectively.
The Group’s proven branded growth model has been a key driver
behind these performances reflecting the benefits of its innovation
strategy, consistent brand investment and collaborative customer
partnerships. Gross margins and Trading profit margins increased by
120 and 80 basis points, respectively, compared to two years ago,
reflecting benefits from branded mix and cost efficiency projects
while the Group also increased investment behind its brands
through higher advertising and marketing spend.
One of the Group’s strategies is to increase its investment in
its supply chain infrastructure. The elements of this strategy
include capital investment to (i) increase efficiencies across the
manufacturing and logistics operations and (ii) to facilitate growth
through the Group’s innovation strategy. Through these strategies,
the Group expects to deliver improvements in gross margin, which
then provides funds for additional brand investment, in line with
the branded growth model and so drive further branded revenue
growth as part of a virtuous cycle. An example of such investment
includes a new pots line at the Ashford site, which will deliver
innovation growth for the Batchelors and Sharwood’s brands.
Premier Foods plc
www.premierfoods.co.uk
 43
STRATEGIC REPORT
Operating and financial review CONTINUED
Commentary versus prior year
The commentary in the following section is made by comparison to
the 52 weeks ended 3 April 2021, unless otherwise stated
As outlined above, the Group reported Trading profit of £148.3m
in FY21/22. This matches the exceptional performance delivered in
the prior year when Trading profit benefitted from the operational
leverage effects of elevated volumes during the various lockdown
phases of the pandemic. Divisional contribution was slightly lower at
£193.6m while Group & corporate costs declined by 2.7% to £45.3m.
The Grocery business reported Divisional contribution of £160.2m
which was (7.1%) lower than the last year while Sweet Treats saw
excellent Divisional contribution growth of 49.6% to £33.4m.
Last year, the Grocery business saw some exceptionally strong
performances across its branded portfolio, as the substantial
increase in volumes seen during the peaks of the Covid pandemic
saw benefits to operational leverage, which in turn fed through to
Divisional contribution. With Grocery volumes lower than FY20/21,
this resulted in reduced levels of operational leverage and hence
lower Divisional contribution in the year.
In Sweet Treats, Divisional contribution increased by £11.0m to
£33.4m in the year. This strong progress reflects improved supply
chain efficiencies, lower Covid related costs in the year and
branded mix benefits as higher margin Mr Kipling and Cadbury
cake sales increased while non-branded sales declined. Unlike the
Group’s grocery categories, the cake market was less impacted by
exceptional consumer buying trends during the pandemic in 2020.
The Group continued to invest in its market leading brands during
the year with Ambrosia, Batchelors, Bisto, Mr Kipling, Oxo and
Sharwood’s all benefitting from TV advertising. Additionally, some
of these brands received investment in shorter, YouTube activation
media which focus on helping consumers with ideas on recipes
and cooking ideas. Looking ahead to FY22/23, the Group has plans
for increased levels of brand investment as the prior year, as it
continues to consistently apply its branded growth model strategy.
Group & corporate costs of £45.3m benefitted from lower
management and colleague bonuses in the year and the release of
a provision no longer required.
During the course of the year, global supply chains across a number
of industries faced a range of challenges including a shortage of
heavy goods vehicle (HGV) drivers; general labour shortages and
an increasingly inflationary environment. The Group successfully
navigated through this environment during FY21/22, demonstrating
the strength of its supplier and customer relationships and
delivering in line with its plans.
Following the tragic events unfolding in Ukraine in early 2022, a
number of global commodity and energy markets are expected
to rise further. While the Group has no direct exposure through
revenue or purchases from Russia or Ukraine, it expects to be
impacted by rising global commodity markets over the coming
months. Consequently, the Group will take mitigating actions to
recover increased costs, both through cost efficiency measures and
pricing actions.
Operating profit
£m
FY21/22
(52 weeks)
FY20/21
(53 weeks)
Change vs
1 year ago
Change vs
2 years ago*
Adjusted EBITDA
3
167.5 170.4 (2.9) 15.0
Depreciation (19.2) (19.1) (0.1) 0.7
Trading profit 148.3 151.3 (3.0) 15.7
Amortisation of intangible assets (27.0) (30.4) 3.4 2.4
Fair value movements on foreign exchange & derivatives 4.4 (2.3) 6.7 2.7
Net interest on pensions and administrative expenses 4.2 9.7 (5.5) 8.8
Non-trading items:
 Restructuring costs – (4.9) 4.9 4.1
 GMP equalisation (0.3) (2.9) 2.6 (0.3)
 Other non-trading 1.5 (0.5) 2.0 2.4
Operating profit before gain on sale of Hovis 131.1 120.0 11.1 35.8
Reversal of impairment loss of Loan receivable – 15.7 (15.7) –
Profit on disposal of investment in associate – 16.9 (16.9) –
Operating profit 131.1 152.6 (21.5) 35.8
Operating profit in the year was £131.1m, a decrease of £21.5m
compared to the prior year. This was largely due to the reversal
of the impairment loss on the Hovis loan note principal and profit
on disposal of the Hovis investment in the comparative period
of £32.6m. Operating profit before gain on sale of the Hovis
investment associate grew by £11.1m in the year to £131.1m.
Amortisation of intangible assets was £27.0m in the year, a
£3.4m reduction compared to FY20/21. Fair valuation of foreign
exchange and derivatives resulted in a positive movement of £4.4m
compared to the comparative period. An impairment reversal of
£15.7m was recognised in the prior year in respect of the Hovis loan
note previously written off; this reflected a reassessment of the
loan note’s recoverability. Hovis Holdings Limited was disposed by
the Company and The Gores Group to Endless LLP on 5 November
2020. Additionally, a profit on disposal of £16.9m was recognised in
the prior year following completion of this transaction.
Net interest on pensions and administrative expenses was a credit
of £4.2m in the year. Expenses for operating the Group’s pension
schemes were £6.8m in the FY21/22, offset by a net interest credit
of £11.0m due to an opening surplus of the Group’s combined
pension schemes. There were no restructuring costs incurred in the
year; charges in the prior year of £8.3m were largely due to costs
associated with advisory work on the segregated merger pensions
agreement announced on 20 April 2020. Other non-trading income
of £1.5m primarily related to the resolution of a legacy legal matter.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 44
Finance costs
Net finance cost was £28.5m, a decrease of £1.3m compared to the comparative period. Net regular interest was £19.8m, a £13.2m
reduction compared to the prior year and nearly half that of two years ago. This reduction was due to lower Senior secured notes interest
charges following redemptions of the Group’s now retired 2022 Floating Rate Notes (“FRN”). Additionally, the Group issued new £330m
Fixed Rate Notes due October 2026 in FY21/22, replacing the previous £300m Fixed Rate Notes due July 2023 which were fully repaid in
the year. The October 2026 Notes attract a lower coupon (3.5%) compared to the retired October 2023 Notes which attracted a coupon of
6.25%, therefore representing a significant ongoing saving for the Group. Consequently, Senior secured notes interest declined by £12.1m
to £13.4m when compared to the prior year on a 52 week basis.
£m
FY21/22
(52 weeks)
FY20/21*
(52 weeks)
Change vs
1 year ago*
Change vs
2 years ago*
FY20/21
(53 weeks)
Senior secured notes interest 13.4 25.5 12.1 17.6 25.9
Bank debt interest - net 4.3 4.6 0.3 0.7 4.6
17.7 30.1 12.4 18.3 30.5
Amortisation of debt issuance costs 2.1 2.9 0.8 1.2 2.9
Net regular interest
5
19.8 33.0 13.2 19.5 33.4
Write-off of financing costs 4.3 (4.3) 1.3
Early redemption fee 4.7 (4.7) –
Discount unwind (0.9) 2.2 (1.1)
Other finance cost 0.8 0.3 0.9
Other finance income (0.2) 0.2 (4.7)
Net finance cost 28.5 13.2 29.8
Bank debt interest of £4.3m was £0.3m lower than the prior year and the Group’s revolving credit facility was undrawn as at 2 April 2022.
Amortisation of debt issuance costs were £0.8m lower at £2.1m, reflecting a lower quantum of borrowing facilities held by the Group.
Following the completion of the Group’s refinancing in the year, the write-off of financing costs associated with borrowings now retired and
facilities which have since been replaced, were £4.3m in the period. Additionally, and as expected, a fee of £4.7m was incurred relating to
the early redemption of the Group’s now retired £300m 2023 dated Fixed Rate Notes.
In the prior period, other finance income of £4.7m related to the reversal of the impairment on interest on the Hovis loan note, reflecting
the reassessment of the loan note’s recoverability.
Taxation
£m FY21/22 FY20/21 FY19/20
Profit before taxation 102.6 122.8 53.6
 Tax charge at rate of 19.0% (19.5) (23.3) (10.2)
Tax effect of:
 Changes in tax rate (7.2) – 4.9
 Capital gain on disposal of business – 6.6 –
 Other items 1.6 (0.1) (1.8)
Income tax (charge) (25.1) (16.8) (7.1)
Deferred tax asset 23.1 28.4 –
Deferred tax liability 212.9 85.8 184.9
The taxation charge for the year to 2 April 2022 was £25.1m (2020/21: £16.8m). This charge comprised primarily a charge on operating
activities of £19.5m (2020/21: £23.3m) and £7.2m due to tax rate changes. In the Government’s 2021 spring budget, the rate of corporation
tax effective from April 2023 will increase from the current level of 19% to 25%. Therefore, deferred tax balances have been restated
depending on the rate which they are expected to unwind.
The Group retains brought forward losses which it can utilise to offset against future tax liabilities. Due to changes in tax legislation with
respect to the offset of tax losses, the Group expects to recommence paying cash tax in low single digit £millions in the medium-term.
Premier Foods plc
www.premierfoods.co.uk
 45
STRATEGIC REPORT
Operating and financial review CONTINUED
Earnings per share
Earnings per share (£m)
FY21/22
(52 weeks)
FY20/21
(53 weeks)
Change vs
1 year ago
Change vs
2 years ago*
Operating profit 131.1 152.6 (21.5) 35.8
Net finance cost (28.5) (29.8) 1.3 13.1
Profit before taxation 102.6 122.8 (20.2) 49.0
Taxation (25.1) (16.8) (8.3) (18.0)
Profit after taxation 77.5 106.0 (28.5) 31.0
Average shares in issue (million)
858.8 851.4 7.4 12.1
Basic Earnings per share (pence) 9.0 12.5 (3.5) 3.5
Profit before tax was £102.6m in the year, a decrease of £20.2m compared to FY20/21 and Profit after tax was £77.5m, £28.5m lower than
the comparative period. On a two year comparator basis, profit before tax increased by £49.0m and profit after tax was £31.0m higher.
Basic earnings per share was 9.0 pence compared to 12.5 pence in the prior period.
Adjusted earnings per share (£m)
FY21/22
(52 weeks)
FY20/21*
(52 weeks)
Change vs
1 year ago*
Change vs
2 years ago*
Trading profit 148.3 148.3 0.0% 11.9%
Less: Net regular interest (19.8) (33.0) 40.0% 49.5%
Adjusted profit before tax 128.5 115.3 11.4% 37.6%
Less: Notional tax (19%) (24.4) (21.9) (11.4%) (37.6%)
Adjusted profit after tax
6
104.1 93.4 11.4% 37.6%
Average shares in issue (millions) 858.8 851.3 7.5m 12.2m
Adjusted earnings per share (pence) 12.1 11.0 10.5% 35.7%
Adjusted profit before tax increased by 11.4% in the year to £128.5m, as Trading profit was in line with the prior period and net regular interest
costs declined significantly, as described above. Adjusted profit after tax also grew by 11.4%, to £104.1m after deducting a notional 19.0% tax
charge of £24.4m. Based on average shares in issue of 858.8 million shares, adjusted earnings per share were 10.5% higher at 12.1p.
When compared to two years ago, adjusted profit before tax increased by 37.6% due to both higher Trading profit and a significantly lower
net regular interest charge. Over this time frame, adjusted profit after tax and adjusted earnings per share increased by 37.6% and 35.7%
respectively.
Statutory cash flow statement
£m FY21/22 FY20/21
Cash generated from operating activities 90.1 85.6
Cash (used in)/generated from investing activities (23.2) 13.8
Cash used in financing activities (13.7) (276.2)
Net increase/(decrease) in cash and cash equivalents 53.2 (176.8)
Cash, and cash equivalents at beginning of period 1.1 177.9
Cash and cash equivalents at end of period 54.3 1.1
Free cash flow
£m FY21/22 FY20/21
Trading profit 148.3 151.3
Depreciation 19.2 19.1
Other non-cash items 4.1 3.4
Capital expenditure (23.2) (23.6)
Working capital (21.0) 0.6
Operating cash flow 127.4 150.8
Interest (20.8) (32.6)
Pension contributions (41.4) (47.0)
Free cash flow
10
65.2 71.2
Non-trading items 0.9 (5.1)
Net proceeds from share issue 1.3 1.7
Re-financing fees (13.2) –
Sale of property, plant and equipment – 0.1
Dividend (including pensions match) (11.0) –
Disposal proceeds – 30.3
Movement in cash 43.2 98.2
Repayment of borrowings (320.0) (275.0)
Proceeds from borrowings 330.0 -
Net increase/(decrease) in cash and cash equivalents 53.2 (176.8)
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 46
On a statutory basis, cash generated from operations was £110.9m
compared to £118.2m in the comparative period. Cash generated
from operating activities was £90.1m after deducting net interest
paid of £20.8m. Cash used in financing activities was £13.7m in the
year versus £276.2m in the prior year and includes the proceeds
from the issuance of the Group’s £330m 2026 dated 3.5% Fixed
Rate Notes in the period. These proceeds were largely offset by the
repayment in full of the Group’s £300m 2023 dated 6.25% Fixed
Rate Notes, the last remaining £20.0m tranche of the Group’s FRN,
financing fees of £8.5m, an early redemption fee of £4.7m relating
to the retirement of the £300m Fixed Rate Notes and dividends
paid to shareholders of £8.5m. In FY20/21, the Group repaid a
drawdown of £85.0m on its committed revolving credit facility
in the first quarter of the year. This followed an earlier prudent
decision by the Group at the end of the previous financial year to
draw this £85.0m sum, reflecting early stage wider uncertainties
associated with the Covid-19 pandemic. Secondly, the Group
used cash generated during FY19/20 and FY20/21 to fund part
redemptions of its FRN totalling £190.0m.
The Group reported an inflow in cash in the year of £43.2m. Trading
profit of £148.3m was £3.0m lower than the prior year for the
reasons outlined above, while depreciation of £19.2m was similar
to the prior year. Other non-cash items of £4.1m was £0.7m higher
and was predominantly due to share based payments.
Net interest paid of £20.8m was £11.8m lower than the prior
year; this was due to reduced interest payments following the
redemption of the Group’s FRN and the issue of £330m Fixed Rate
Notes due October 2026 which attract a coupon of 3.5%. These
Fixed Rate Notes replaced the previous £300m Fixed Rate Notes
due October 2023 which were repaid in the year and attracted a
coupon of 6.25%. There was no taxation paid in FY21/22 due to the
availability of brought forward losses and capital allowances.
Total pension contributions in the year were £41.4m, a £5.6m
reduction compared to prior year, reflecting lower administration
costs. Pension deficit contribution payments were £37.6m and
administration costs amounted to £3.8m.
Capital expenditure was £23.2m and was broadly in line with
the prior year. In the medium-term, the Group expects capital
expenditure to be in the range of £30-35m, as it looks to accelerate
investment across the supply chain, covering both growth projects
supporting the Group’s innovation strategy and cost release
projects to deliver efficiency savings. One of the key objectives of
this programme, is through improving operational efficiency, the
resultant accretion in gross margin will provide additional funds
for brand investment. This strategy of investing in supply chain
infrastructure represents a virtuous cycle to provide the fuel for the
Group’s branded growth model.
The year saw a working capital outflow of (£21.0m) compared to
an inflow of £0.6m in the prior year. This outflow was largely due to
the higher value of input costs on inventory and also higher level of
trade receivables compared to the prior year.
The Group paid re-financing fees during the year which amounted
to £13.2m and were largely due to advisory, legal and arrangement
fees and included a redemption fee of £4.7m as referred to above.
Dividends paid in the year were £11.0m; of this, £8.5m were
payments made to shareholders and £2.5m was due to a dividend
match payment in favour of the Group’s pension schemes.
Net debt and sources of finance
Net debt at 2 April 2022 was £285.0m, a reduction of £47.7m
compared to the prior year. The movement in cash in the year was
£43.2m and the movement in debt issuance costs was £2.0m. Lease
creditor movements were £2.5m and as at 2 April 2022, the Group
held cash and bank deposits of £54.3m. On a pre-IFRS 16 basis, Net
debt at 2 April 2022 was £268.9m.
Net debt/adjusted EBITDA
3
was 1.7x on a Post-IFRS 16 basis.
£m Post-IFRS 16 Pre-IFRS 16
Net debt at 3 April 2021 332.7 314.1
Movement in cash (43.2) (43.2)
Movement in debt issuance costs (2.0) (2.0)
Movement in lease creditor (2.5) –
Net debt at 2 April 2022 285.0 268.9
Adjusted EBITDA
3
167.5 165.5
Net debt/Adjusted EBITDA
3
1.7x 1.6x
During the year, the Group entered into a new revolving credit
facility (RCF) with an updated lending group for a period of
three years from May 2021 with extension options for up to two
additional years. This new senior secured RCF is a committed facility
of £175m and includes an interest margin grid broadly in line with
the previous RCF. The prevailing coupon on the RCF is currently
2.5% above GBP SONIA and undrawn elements of the RCF attract
interest equivalent to 35% of the applicable margin. Following the
year end, the Group completed the first extension of the RCF facility
to 2025.
Additionally, the Group issued new October 2026 dated £330m
Fixed Rate Notes during the year. These notes attract an interest
coupon of 3.5%; the first call date in 15 June 2023. As referred to
above, the Group redeemed in full its £300m 2023 dated Fixed Rate
Notes and the outstanding 2022 dated FRN during the year.
Premier Foods plc
www.premierfoods.co.uk
 47
STRATEGIC REPORT
Operating and financial review CONTINUED
Pensions
IAS 19 results and commentary
IAS 19 Accounting Valuation (£m)
2 April 2022 3 April 2021
RHM
Premier
Foods Combined RHM
Premier
Foods Combined
Assets 4,273.7 826.3 5,100.0 4,459.4 792.5 5,251.9
Liabilities (3,134.9) (1,020.2) (4,155.1) (3,536.9) (1,175.1) (4,712.0)
Surplus/(Deficit) 1,138.8 (193.9) 944.9 922.5 (382.6) 539.9
Net of deferred tax (25%/19.0%) 854.1 (145.4) 708.7 747.2 (309.9) 437.3
The IAS 19 pension schemes valuation reported a surplus for the
combined RHM and Premier Foods’ pension schemes at 2 April
2022 of £944.9m, an increase of £405.0m compared to the prior
year. This is equivalent to a surplus of £708.7m net of a deferred
tax charge of 25.0%. The reduction in value of liabilities of £556.9m
is the main driver behind the movement in the surplus and
substantially reflects an increase in the applicable discount rate
from 2.00% to 2.75% between the two respective periods. Asset
values across the two sets of schemes reduced by £151.9m, with
the RHM scheme asset values reducing by £185.7m and the Premier
Foods scheme assets increasing by £33.8m. When compared to
the position at 3 April 2021, the RHM scheme surplus increased by
23.4% while the Premier Foods’ scheme deficit reduced by 49.3%.
Deferred tax of 25.0% is deducted from the IAS 19 retirement
benefit valuation of the Group’s schemes to reflect the fact that
pension deficit contributions made to the Group’s pension schemes
are allowable for tax. The deferred tax rate has been increased from
the 19.0% rate used for the prior period to 25.0% following the
change in the UK’s corporation tax rate, effective from April 2023.
Combined pensions schemes (£m) 2 April 2022 3 April 2021
Assets
 Equities 10.4 14.9
 Government bonds 1,213.7 1,625.4
 Corporate bonds 6.3 1.0
 Property 576.9 467.9
 Absolute return products 934.7 1,112.1
 Cash 113.8 79.8
 Infrastructure funds 364.7 321.5
 Swaps 490.9 485.4
 Private equity 320.0 240.6
 LDI 7.7 191.2
 Illiquid credits 273.2 174.9
 Global credits 628.6 318.6
 Other 159.1 218.6
Total Assets 5,100.0 5,251.9
Liabilities
 Discount rate 2.75% 2.00%
 Inflation rate (RPI/CPI) 3.6%/3.2% 3.25%/2.80%
Actuarial valuation update and NPV of deficit
contributions
Following the segregated merger of the Group’s pension schemes,
effective June 2020, an interim actuarial funding valuation of the
Premier Foods and Premier Grocery Products sections as at 31
March 2021 has been completed. The outcome of this valuation
has resulted in a £125m reduction in the deficit of these schemes
from £552m as at 31 March 2019 to £427m as at 31 March 2021.
Following the reduction in this deficit, the Company and Trustees
of the schemes have agreed to reduce the length of the current
pension deficit contribution schedule by two years. Consequently,
the net present value of future pension contributions to the end
of the respective recovery periods has reduced by approximately
£60m, from £300-320m
15
to £240-260m.
Capital allocation
The Group is a highly cash generative business and has substantially
reduced its interest costs. Today, the allocation of capital is split
across pension contributions, capital investment and dividends,
with a strategy to explore bolt-on M&A. In the medium-term, we
expect pensions contributions to reduce, freeing up increased cash
to spend on capital investment, dividends and M&A.
Outlook
The Group enters FY22/23 in a strong position, following another
year of successful strategic and financial progress. It continues to
execute against its five point strategy, growing the core UK business;
investing in its infrastructure; expanding into new categories;
building its overseas business and exploring M&A opportunities.
Initial trading so far this financial year has been in line with the
Board’s plans, and it is confident in the delivery of its full year
expectations. The Group expects to see further input cost inflation,
which it will continue to manage using a range of measures
including cost efficiency programmes and further pricing action. The
resilience of the Group’s brands, categories and supply chain means
it is well positioned to deliver further progress this year, while it’s
target of approximately 1.5x Net debt/adjusted EBITDA
3
remains
unchanged.
Duncan Leggett
Chief Financial Officer
18 May 2022
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 48
Appendices
The Company’s Preliminary results are presented for the 52 weeks ended 2 April 2022 and the comparative period, 53 weeks ended 3 April
2021 and 52 weeks ended 28 March 2020. References to the ‘quarter’, unless otherwise stated, are for the 13 weeks ended 2 April 2022
and the comparative periods, 13 weeks ended 3 April 2021 and 13 weeks ended 28 March 2020. To aid comparability of results, headline
results are provided on a 52 week basis and reconciliations provided to a 53 week basis.
Headline group results for 52 weeks ended 2 April 2022 and comparative 53 weeks ended 3 April 2021 and 52 weeks ended
28 March 2020
£m
FY21/22
52 week
basis
FY20/21
53 week
basis
Exclude:
53 week
FY20/21
52 week
basis
FY19/20
52 week
basis
Revenue
 Grocery 647.7 702.6 (9.2) 693.4 611.6
 – Branded 560.1 609.3 (7.6) 601.7 514.7
 – Non-branded 87.6 93.3 (1.6) 91.7 96.9
 Sweet Treats 252.8 244.4 (3.6) 240.8 235.5
 – Branded 214.0 203.2 (3.3) 199.9 190.9
 – Non-branded 38.8 41.2 (0.3) 40.9 44.6
 Group 900.5 947.0 (12.8) 934.2 847.1
 – Branded 774.1 812.5 (10.9) 801.6 705.6
 – Non-branded 126.4 134.5 (1.9) 132.6 141.5
Divisional contribution
 Grocery 160.2 174.7 (2.2) 172.5 148.2
 Sweet Treats 33.4 23.2 (0.8) 22.4 23.7
 Total 193.6 197.9 (3.0) 194.9 171.9
Trading profit 148.3 151.3 (3.0) 148.3 132.6
Adjusted EBITDA
3
167.5 170.4 (3.3) 167.1 152.5
Adjusted EBITDA
3
(excl IFRS 16) 165.5 168.2 (3.3) 164.9 149.9
Net regular interest (19.8) (33.4) 0.4 (33.0) (39.3)
Adjusted profit before tax 128.5 117.9 (2.6) 115.3 93.3
Adjusted eps 12.1 11.2 (0.2) 11.0 8.9
Net debt 285.0 332.7 N/A N/A 429.6
Net debt (excl IFRS 16) 268.9 314.1 N/A N/A 408.1
Net debt/adjusted EBITDA
3
1.7x 2.0x N/A N/A 2.8x
Net debt/adjusted EBITDA
3
(excl IFRS 16) 1.6x 1.9x N/A N/A 2.7x
Quarter 4 Revenue
£m – 52 week basis FY21/22 Q4 Revenue Grocery Sweet Treats Group
Branded 143.8 55.4 199.2
Non-branded 22.3 4.3 26.6
Total 166.1 59.7 225.8
FY20/21 Q4 Revenue
Branded 152.1 50.7 202.8
Non-branded 20.3 3.8 24.1
Total 172.4 54.5 226.9
% change vs 1 year ago
Branded (5.5%) 9.2% (1.8%)
Non-branded 10.0% 13.1% 10.5%
Total (3.6%) 9.5% (0.5%)
FY19/20 Q4 Revenue
Branded 142.5 47.1 189.6
Non-branded 24.0 4.6 28.6
Total 166.5 51.7 218.2
% change vs 2 years ago
Branded 0.9% 17.7% 5.1%
Non-branded (6.9%) (7.6%) (7.0%)
Total (0.2%) 15.4% 3.5%
Premier Foods plc
www.premierfoods.co.uk
 49
STRATEGIC REPORT
Notes and definitions of non-GAAP measures
The Company uses a number of non-GAAP measures to measure
and assess the financial performance of the business. The Directors
believe that these non-GAAP measures assist in providing additional
useful information on the underlying trends, performance and
position of the Group. These non-GAAP measures are used by the
Group for reporting and planning purposes and it considers them
to be helpful indicators for investors to assist them in assessing the
strategic progress of the Group.
1. The Group uses Trading profit to review overall Group
profitability. Trading profit is defined as profit/(loss) before tax,
before net finance costs, amortisation of intangible assets, fair
value movements on foreign exchange and other derivative
contracts, net interest on pensions and administration expenses
and any material items that require separate disclosure by
virtue of their nature in order that users of the financial
statements obtain a clear and consistent view of the Group's
underlying trading performance.
2. Divisional contribution refers to Gross Profit less selling,
distribution and marketing expenses directly attributable to the
relevant business segment.
3. Adjusted EBITDA is Trading profit as defined in (1) above
excluding depreciation.
4. Adjusted profit before tax is Trading profit as defined in (1)
above less net regular interest.
5. Net regular interest is defined as net finance cost after
excluding write-off of financing costs, early redemption fees,
other interest payable and other finance income.
6. Adjusted profit after tax is Adjusted profit before tax as defined
in (4) above less a notional tax charge of 19.0% (2020/21:
19.0%).
7. Adjusted earnings per share is Adjusted profit after tax as
defined in (6) above divided by the weighted average of the
number of shares of 858.8 million (53 weeks ended 3 April
2021: 851.4 million).
8. International sales remove the impact of foreign currency
fluctuations and adjusts current year sales to ensure
comparability in geographic market destinations. The constant
currency calculation is made by adjusting the current year’s
sales to the same exchange rate as the prior year and two
years ago, as applicable. The constant currency adjustment is
calculated by applying a blended rate.
The following are stated on a 52 week basis for each
respective year:
£m Reported Adjustment
Constant
currency
FY21/22 53.4 1.4 54.8
FY20/21 53.9 N/A 53.9
Growth/(decline) % (1.0%) 1.6%
£m Reported Adjustment
Constant
currency
FY21/22 53.4 0.6 54.0
FY19/20 43.3 N/A 43.3
Growth/(decline) % 23.3% 24.6%
9. Net debt is defined as total borrowings, less cash and cash
equivalents and less capitalised debt issuance costs.
10. Free cash flow is Net increase or decrease in cash and cash
equivalents excluding proceeds and repayment of borrowings,
less dividend payments, disposal proceeds, re-financing fees,
proceeds from share issues and non-trading items.
11. FY21/22 guidance provided at Q3 trading update, 19 January
2022: at least £145m Trading profit; at least £125m Adjusted
profit before tax.
12. Branded revenue is revenue generated from products sold
by the Group under owned brands, or licensed brands, such
as Ambrosia, Batchelors, Bisto, Loyd Grossman, Mr Kipling,
Sharwood’s, Oxo and others.
13. Non-branded revenue is revenue generated by products sold
by the Group which are not labelled as brands owned, or sold
under licence, by the Group.
14. IRI, 52 weeks ended 26 March 2022.
15. The schedule of future contributions are as agreed per the
2021 interim actuarial funding valuation for the Premier Foods
Schemes, discounted using the Company post tax WACC
of 7.4%.
Additional notes:
• The Directors believe that users of the financial statements are
most interested in underlying trading performance and cash
generation of the Group. As such intangible asset amortisation
and impairment are excluded from Trading profit because they
are non-cash items.
• Restructuring costs have been excluded from Trading profit
because they are incremental costs incurred as part of specific
initiatives that may distort a user’s view of underlying trading
performance.
• Net regular interest is used to present the interest charge
related to the Group’s ongoing financial indebtedness, and
therefore excludes non-cash items and other credits/charges
which are included in the Group’s net finance cost.
• Group & corporate costs refer to group and corporate expenses
which are not directly attributable to a business unit and are
reported at total Group level.
• In line with accounting standards, the International and
Knighton business units, the results of which are aggregated
within the Grocery business unit, are not required to be
separately disclosed for reporting purposes.
Operating and financial review CONTINUED
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 50
Risk management
Board of Directors
Assess principal risks and set risks appetite.
Overall responsibility for maintaining sound risk
management and internal controls.
Audit Committee
Set risk management framework. Assess
effectiveness of the Group’s risk framework
and internal controls.
Executive Leadership Team
Implement risk management framework.
Assess effectiveness of the Group’s risk
framework and internal controls.
Risk and Internal Audit
Test internal controls and co-ordinate risk management
activity, provide support to business risk owners and
report risk information across the Group.
Operational Management
Own and review operational risks, operate
controls and implement mitigation actions.
I
D
E
N
T
I
F
Y
R
E
S
P
O
N
D
M
E
A
S
U
R
E
M
O
N
I
T
O
R
A
N
D
R
E
P
O
R
T
RISK
MANAGEMENT
PROCESS
• Periodic reports provided to the
ELT and Board on how efficiently
risks are being managed
• Controls defined to address risks
within tolerance and ownership
defined
• Risk action plans created to manage
risks within appetite
• Strategic reviews with ELT
• Group principal risks reviewed and
agreed with ELT and the Board
• Risk appetite set by the Board for all
principal risks
• Measurement of risks against
appetite and escalation process
Top downBottom up
Risk management framework
Our approach
As with any business we face risks and
uncertainties. We believe that effective
risk management supports the successful
delivery of our strategic objectives. We
have an established risk management
framework to identify, evaluate, mitigate
and monitor the risks we face as a
business. Our risk management framework
incorporates both a top-down approach to
identify our principal risks and a bottom-
up approach to identify our operational
risks. The Executive Leadership Team (ELT)
perform a robust risk assessment on a
periodic basis and the output is reviewed
with the Audit Committee at least twice a
year. This review includes an assessment
of the movement in the risks, the strength
of the controls relied on and the status of
mitigating actions. The principles of risk
management have also been embedded
into the day-to-day operations of the
business units and corporate functions.
The long-term viability statement on page
58 provides a broader assessment of the
longer-term prospects of the Group after
consideration of the principal risks and
availability of funding.
Principal risks and uncertainties
The Board have carried out a robust
assessment of the principal risks facing
the Group, including those that would
threaten its business model, future
performance, solvency or liquidity. We are
exposed to a variety of other risks but we
report those we believe are likely to have
the greatest current or near-term impact
on our strategic and operational plans
and reputation. These risks (gross) and
uncertainties are identified in the heatmap
on the next page (in no particular order),
followed by a more detailed description
including key mitigating activities in place
to address them. We have also considered
the broad potential impacts of the current
Russia-Ukraine conflict and inflationary
pressures which impacts a number of our
principal risks. The ‘Changes since FY20/21’
highlight changes in the profile of our
principal risks or describe our experience
and activity over the last year. We have
reduced the residual risk associated with
Brexit following the UK and EU agreement
of a tariff-free trade deal to the extent
it is no longer deemed a principal risk in
isolation.
Risk appetite
Our approach is to minimise exposure to
reputational, financial and operational
risk, while accepting and recognising a
risk/rewards trade-off in pursuit of our
strategic and commercial objectives. As a
food manufacturing company, with many
well known brands, the integrity of our
business is crucial and cannot be put at
risk. Consequently we have a zero tolerance
for risks relating to Occupational Health
& Safety and food safety. We operate in a
challenging and highly competitive market
place and as a result we recognise that
strategic, commercial and investment risks
will be required to seize opportunities and
deliver results at pace. We are therefore
prepared to make certain financial and
operational investments in pursuit of
growth objectives, accepting the risks
that the anticipated benefits from these
investments may not always be fully
realised. Our acceptance of risk is subject
to ensuring that potential benefits and risks
are fully understood and sensible measures
to mitigate those risk are established.
Premier Foods plc
www.premierfoods.co.uk
 51
STRATEGIC REPORT
Link to our strategy:
Continue to grow the UK core
Supply chain investment
Expand UK into new categories
Build International businesses
with critical mass
Inorganic opportunities
Risk management CONTINUED
Emerging risks
There are two ways in which we have
identified our emerging risks in this
report. First, for our principal risks, we
have noted in the following pages some
emerging threats regarding these risks.
These uncertainties may relate to future
regulatory, economic, environmental
or political changes. Secondly, we also
face a number of uncertainties where an
emerging threat may potentially impact us
in the longer term. In some cases, there
may be insufficient information available
to understand the likely scale and impact
of the risk. We also might not be able to
fully define a mitigation plan until we have
a better understanding of the threat. We
have created a watchlist of these risks
which we will review on a regular basis to
monitor any changes to the likely impact on
our business. Using the identified emerging
risks, we evaluate the impact and the effect
it would have on the Group (including those
impacting our principal risks). Examples of
our latest emerging risks are:
• Additional regulations or investor
pressure brought on by Environmental,
Social and Governance (‘ESG’)
requirements; and
• Ability to attract and retain talent in a
tightening labour market.
Future initiatives
We continuously evolve and improve our
approach to risk management in light of the
ever increasing volatility and uncertainty
in the external environment. In addition,
our risk team plays a key role in Task Force
on Climate-Related Financial Disclosures
(TCFD) Steering Group, which is responsible
for our approach to the requirements of
TCFD. We will support the integration of
this activity into the current Enterprise
Risk Management process, adapting and
integrating the approach taken, so that
climate related considerations become part
of our longer-term strategic thinking and
decision making in the business. See pages
36 to 40 for further details on our approach
to TCFD.
Arrows indicate the change in risk
since the prior year
Risk trend
Increased
Decreased
Stable/unchanged
New risk
1
2
10
9
 
4
 
5
6
7
8
3
Low Medium High
Exceeding risk appetite
Within risk appetite
Low Medium High
Change in gross risk
level from prior year
Increased
Decreased
Stable/unchanged
N
New Risk
 52
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
Risk and potential impact How we manage it Changes since FY20/21
1
Macroeconomic & geopolitical instability
Link to strategy Risk trend
Our business has been subject to a period of
prolonged uncertainty owing to political and
ongoing economic developments related to
Covid-19 and inflationary pressures which may
affect our supply chain, thereby increasing
the Group’s cost base. The Russian invasion
of Ukraine has resulted in further inflationary
pressure across a range of commodities, see
Risk 4.
• We manage the impact of commodity price
inflation and foreign exchange volatility through
hedging activity and ongoing supplier risk
management.
• The ELT closely monitors developments related
to the Covid-19 threat to ensure appropriate
incident and response plans are in place. Above
all, we maintain our commitment to the health
and safety of our employees and customers by
putting people first.
• We reviewed our customer and supplier base for
potential exposure to Russian trade sanctions.
The ELT closely monitors developments in
Ukraine and determines appropriate mitigating
actions.
• We seek to hedge certain key commodities and
energy supplies, where appropriate, to manage
our exposure to further price increases.
• Our cost saving and efficiency programmes seek
to minimise the impact of inflationary pressures,
as far as possible, and price increases are
considered where necessary
• The risk profile increased during the year
primarily due to inflationary pressures caused
by the impact of the Covid-19 pandemic on
the availability of HGV drivers and supply of
commodities.
• The Russia-Ukraine conflict further
exacerbated the impact on wholesale energy
prices and other key commodities.
• The UK Government issued its ‘Living with
Covid Plan’ on 23 February 2022 and ended
all legal Covid-19 related restrictions. As a
business, we began scaling back previously
introduced measures in a phased, risk based
approach, at all our sites and in consultation
with our employees (particularly those
deemed critically vulnerable).
• See Risk 4 for additional changes.
2
Impact of Government legislation
Link to strategy Risk trend
The continued focus on health and obesity may
result in a decline in demand for cakes and
desserts and/or our share of it, along with the
risk of additional complexity and cost as a result
of any reformulation efforts. There is a high and
ever increasing level of media and government
scrutiny on health and obesity, as highlighted
in the UK by the proposed introduction of
regulation over High Fat, Salt or Sugar (HFSS)
products. We are in a unique position to enable
consumers to lead healthier lifestyles. The UK
Government has also introduced a new tax on
non-recyclable plastic packaging as part of the
reformed Packaging Producer Responsibility
Regulations. The introduction of an escalating
tax on plastic packaging and any further
legislation may adversely impact the products
that the Group manufactures.
• We have a wide range of product offerings,
which includes our market-first non-HFSS cake,
which will extend our range of healthier choices,
enhance the nutrition profile of our existing core
ranges and educate consumers and colleagues
to make healthier eating choices. Details can be
found in our Enriching Life Plan section.
• Ongoing evaluation and development of the
brand portfolio and innovation pipeline towards
healthier options (as previously described in our
Enriching Life Plan section).
• We work closely with non-governmental
organisations and trade associations in our
market to fully participate in the debate and
help shape solutions.
• Our Environmental Social Governance (‘ESG’)
Committee is chaired by our Group CEO.
We have a range of cross-functional steering
groups which are responsible for the delivery of
our ESG strategy, including our Plastics steering
group.
• We continue our efforts to optimise our
packaging and to reduce its environmental
impact and mitigate the impact of the tax on
non-recyclable packaging, by using materials
from certified sustainable sources wherever
possible, increasing our use of recycled
materials, and increasing the recyclability of our
packaging. 96% of our packaging, by weight, is
recyclable.
• We have developed KPIs to drive our progress
on ESG forward, including (amongst others)
embedding environmentally sustainable
packaging across our product portfolio (see our
Enriching Life Plan on pages 24 to 35 for details).
• The risk profile remained stable year-on-year.
• The Department of Health and Social Care
delayed implementation of regulations
associated with the UK Government’s Obesity
Strategy announced (July 2020) to October
2022, the Group has adapted its strategy
in order to address the implications of the
strategy.
• The UK Government’s primary legislation
(November 2020) to introduce an escalating
tax on plastic material came into effect on 1
April 2022.
• We launched our Enriching Life Plan which
sets out a range of short, medium and long-
term targets mapped against three pillars:
Products, Planet and People (see pages 24 to
35 for details).
Premier Foods plc
www.premierfoods.co.uk
 53
STRATEGIC REPORT
Risk management CONTINUED
Risk and potential impact How we manage it Changes since FY20/21
3
Market and retailer actions
Link to strategy Risk trend
As a primarily UK based company, our sales are
concentrated with a relatively small number
of major customers who operate in a highly
competitive market. Maintaining strong
relationships with our existing customers and
building relationships with new customers
and technology-enabled channels is critical
for our brands to be readily available to our
consumers. A failure to do this may impact our
ability to obtain competitive pricing and trade
terms and/or the availability and presentation
of our brands. Actions taken by these retailers
(for example changes in pricing and promotion
strategies), may negatively impact on our
financial performance and can also have an
impact on the overall market for our products.
• We have strong relationships with the major
retailers built on the strength of our brands, our
expertise in our categories and shopper insight.
• We have a programme of continuous innovation
rooted in consumer insights and designed to
build category growth for our customers and
brands.
• We are growing our International business
through applying our proven UK branded growth
model strategy in target markets, which in time
will reduce dependence on the UK market.
• We are investing to build our online channel
presence and capabilities.
• The risk profile remained stable year on year.
• We continued to work with all our customers,
including through category partnerships and
range reviews, to match our product offering
to consumer needs particularly with more
meals eaten at home.
• We recorded significant growth in branded
sales as a result of our strong innovation
pipeline, sustained brand investment and
close customer partnerships.
• We continued to focus on executing our
brands well online which helped drive growth
ahead of the market.
• Our reliable supply performance through
the pandemic has, in general, strengthened
our relationship with retailers and their
confidence in our supply chain resilience,
which has also helped us grow market share.
• Our International business continued to grow
thanks to progress in all the Group’s strategic
markets; Ireland, Australia, USA and Europe.
4
Operational integrity
Link to strategy Risk trend
Delivery of our strategy depends on our ability
to minimise operational disruption from issues
with facilities, factory infrastructure as well as
procurement and logistics functions. Supplier
failure, market shortage or an adverse event in
our supply chain impacts sourcing of our
products and the cost of our products is
significantly affected by commodity price
movements.
• We have a crisis management process in place
and business continuity plans are reviewed and
refreshed on an ongoing basis.
• Insurance coverage is in place to mitigate against
the financial impact of material site issues.
• We consolidated our warehousing and
distribution capability to increase our
operational efficiency. There are close
relationships at all levels of the business
with our outsourced logistics provider.
• Procurement category plans are in place to
mitigate against single supplier risk.
• Cross functional teams help to manage any
sourcing challenges as a result of broader
macroeconomic factors
• We have robust quality management standards
applied and rigorously monitored across our
supply chain.
• We have an ongoing 3-year programme (in
conjunction with our insurers) to move our sites
into a ‘Highly Protected Risk’ status.
• ELT review of plans to ensure appropriate labour
availability across factories, warehouse and
transport.
• The risk profile increased during the year
partly due to factors described in Risk 1.
• The Covid-19 pandemic caused significant
disturbance to global supply chains. Our
suppliers have risen to the challenge to
continue supplying us with raw materials and
bought-in finished goods. Our Procurement,
operational and technical teams have also
managed to source alternative suppliers for
key ingredients where there were potential
interruptions to supply.
• Our factories continued to maintain
production levels through careful
management of production capacity and
through sourcing and retaining a reliable
pool of labour.
• We improved our business resilience through
various initiatives, including maintaining
factory site accessibility, and reviewing the
effectiveness of our business continuity plans.
• We maintained high levels of customer
service despite the disruptions caused by
Covid-19.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 54
Risk and potential impact How we manage it Changes since FY20/21
5
Legal compliance
Link to strategy Risk trend
Our business is subject to a number of legal and
regulatory requirements and must continuously
monitor new and emerging legislation
(domestic and international), in areas such
as Health & Safety, Listing Rules, competition
law, intellectual property, food safety, labelling
regulations and environmental standards. We
are adopting the recommendations of the
Financial Stability Board’s Taskforce on Climate-
Related Financial Disclosures (‘TCFD’). A more
detailed overview of the impact of climate
change on our business can be found in the
climate-related disclosures section.
• As previously described in Risk 2, our ESG
Committee oversees various initiatives, including
compliance with TCFD recommendations.
• We have leading food industry processes in
place to manage Health & Safety and food safety
issues (including an ongoing programme of
internal and external audits).
• We have dedicated Legal and Regulatory teams
in place to monitor laws and regulations to
ensure compliance, protect intellectual property
and defend against litigation where necessary.
• We work closely with our external advisors
and the regulators, government bodies and
trade associations regarding current and future
legislation which would impact upon the Group.
• Whistleblowing processes are in place.
• The risk remained stable year-on-year.
• We have included disclosures on pages 36
to 40 of this report to comply with TCFD
recommendations.
• Our risk management framework is being
enhanced to accommodate and report on
climate risks and appropriate disclosures in
line with TCFD recommendations.
6
Climate risk
Link to strategy Risk trend
N
Climate change has the potential to dramatically
change the world in which we live and operate.
Tackling climate change, by taking measures
to limit its impact to manageable levels, has
become a key priority for governments and
businesses. Considerations for the effects of
climate change (e.g. floods and heatwaves)
may restrict investment decisions but may also
create new opportunities to invest in assets
that may be more sustainable, and develop
a portfolio of products that use sustainable
packaging. There is a risk that the Group may
fail to uphold its environmental responsibilities
and commitments, which in addition to carrying
a reputational impact for the Group, may also
result in breaches of laws or regulations and
may have a financial and/or legal impact for the
Group (see Risk 5). The impact of climate change
may also negatively influence demand for our
products.
• A facilitated workshop and numerous smaller
sessions were held to develop a more
detailed overview of climate risks around the
business. This approach has helped refine our
understanding of the transitional and physical
risks and opportunities presented by climate
change.
• An assessment of the physical risks associated
with more extreme weather across the
company’s manufacturing sites has been carried
out in partnership with our insurance partners,
with one site identified as being at a higher risk
of flooding.
• Throughout this year, our business teams have
developed a broader understanding of our
key risks and opportunities, allowing a more
granular assessment of their likelihood and
impact.
• We have developed new environmental
commitments including decarbonisation
targets, aligned to the Business Ambition for 1.5
degrees, aiming for a 42% reduction in Scopes
1 & 2 emissions between 2020 and 2030, and a
reduction of 25% in Scope 3 emissions over the
same period of time. We have set target dates
to achieve net zero in our own operations by
2040 and across our whole value chain by 2050.
Please refer to pages 32 and 33 for our climate
related initiatives.
• Please refer to pages 32 and 33 for our
climate related initiatives.
Link to our strategy:
Continue to grow the UK core
Supply chain investment
Expand UK into new categories
Build International businesses with critical mass
Inorganic opportunities
Change in gross risk level from prior year
Increased
Decreased
Stable/unchanged
N
New Risk
Premier Foods plc
www.premierfoods.co.uk
 55
STRATEGIC REPORT
Risk management CONTINUED
Risk and potential impact How we manage it Changes since FY20/21
7
Technology
Link to strategy Risk trend
A successful cyber-attack or other systems
failure could result in us not being able to
manufacture or deliver products, plan our
supply chain, pay and receive money, or
maintain proper financial control. This could a
have major customer, financial, reputational
and regulatory impact on our business.
• To reduce the impact of external cyber-attacks
impacting our business we have firewalls and
threat detection & response systems in place.
• Disaster recovery plans across the Group are
reviewed every year with annual penetration
testing also performed.
• Information and IT policies are in place and are
regularly reviewed. Internal phishing campaigns
are run and followed up with training and
guidance.
• Incident response plans are in place, recognising
that while this risk can be managed it cannot be
eliminated.
• Our cyber-security strategy and actions are
regularly monitored by the Audit Committee and
the Board.
• We review the need for cyber-insurance on a
regular basis.
• The risk profile increased during the year due
to heightened cyber-security concerns from
the current geopolitical events as described
in Risk 1.
• We continue to update our processes and
controls as the external environment evolves;
this is informed by periodic third party
reviews.
• Our information technology infrastructure
remains secure and has been able to cope
with the additional network traffic as a result
of our employees working from home during
the lockdown with no significant loss of
connectivity or productivity.
• We continue work to enhance the security
of our factory operational technology
environment.
8
Product portfolio
Link to strategy Risk trend
Consumer preferences, tastes and behaviours
change over time. As part of this, the
consumer’s desire for healthier choices and
premiumisation are significant trends. Our
ability to anticipate these trends, innovate and
ensure the relevance of our brands is critical to
our competitiveness in the market place and
our performance. Furthermore, sales of many
of the Company’s products can be adversely
affected by warm seasonal weather conditions.
We may fail to successfully evolve our portfolio
to take advantage of growth categories
and/or re-invent our core brands to meet
consumer needs.
• We have a programme of innovation, based on
deep rooted consumer insights, to continuously
modernise our portfolio of distinctly British
brands to ensure they remain relevant to today’s
shoppers.
• We continue to review the impact of
weather on sales during our monthly
product performance reviews.
• The risk remained stable year-on-year.
• The impact of the proposed introduction of
HFSS and other regulations is discussed in Risk
2 and 5.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 56
Risk and potential impact How we manage it Changes since FY20/21
9
HR and employee risk
Link to strategy Risk trend
The ongoing success of the Group is dependent
upon attracting and retaining high quality
colleagues at all levels who can effectively
implement the Group’s strategy. Due to
political, economic and legislative uncertainty
and change (previously described in Risk 1),
there is a dual risk that supply of labour may
be in certain areas constrained, and in addition
the cost of labour could increase resulting in
additional financial and operational pressure on
the Group.
• We continue to invest in colleague development
and engagement initiatives on a focused basis.
• We have processes in place to attract talent
into the business with the right capabilities and
behaviours, and recruit the majority of colleagues
through our ‘in house’ team.
• We have succession plans in place to retain and
progress our internal talent pipeline.
• We have a well-established and successful
graduate recruitment and development
programme, and invest heavily in apprenticeship
training.
• We benchmark pay to make sure we remain
competitive in the market and, where
appropriate, make changes to our offering.
• Regular engagement surveys take place across the
company to obtain feedback from our colleagues.
• The risk profile increased during the year due
to the tightening labour market, caused by
the risks described in Risk 1.
• We continually review and improve our
recruitment processes to reflect changing
market conditions.
• We continue to maintain a strong commercial
focus on process and cost improvement to
manage and mitigate the increased cost of
labour.
10
Strategy delivery
Link to strategy Risk trend
Our branded growth model is at the core of
what we do. The strategy focuses on leveraging
our strong brands through launching insight
driven new products, delivering sustained levels
of marketing investment and fostering strong
retail and customer partnerships. Our strategy
may take longer than expected to deliver results
which may impact on the speed at which we
can deliver shareholder value.
• Given the seasonal nature of many of our
brands, media investment is targeted in the
periods of peak consumer demand and through
the most cost effective channels.
• Our new and existing product development
programmes are based on deep consumer
insight and continue to make our product ranges
more relevant to the ever changing lives of our
consumers.
• Our strong strategic relationships with our
key customers facilitate the creation and
joint ownership of plans for mutual growth.
• The risk profile reduced during the year.
• Our branded growth strategy for delivering
new product innovation based on consumer
trends together with high quality advertising
behind our major brands continues to work
very well.
• Our strategy continues to deliver trading
profit at the top end of market expectations
on the back of consistent growth with Net
Debit/adjusted EBITDA falling to below 2.05.
Link to our strategy:
Continue to grow the UK core
Supply chain investment
Expand UK into new categories
Build International businesses with critical mass
Inorganic opportunities
Change in gross risk level from prior year
Increased
Decreased
Stable/unchanged
N
New Risk
Premier Foods plc
www.premierfoods.co.uk
 57
STRATEGIC REPORT
Viability statement
Risk scenarios modelled Action taken
Link to principal risks
(on pages 51 to 57)
Materials, packaging, utilities and supply
chain inflation in the market place*
We have modelled further inflation in the market place, increasing input costs
including driver pay rates, we have assumed that this is not all recovered.
1
2
3
4
A cyber-attack shuts down the
operating systems temporarily
stopping production
We have modelled production stopping at all manufacturing sites for two weeks
in the Viability review period, with the associated loss of sales due to the halt in
production, and taking into account the levels of stock held.
7
Climate change: impact on revenue* We have modelled the reduction in revenue anticipated if temperatures are 1.5 degrees
Celsius warmer than the midterm historic average over the Viability review period.
6
Covid-19: Managing human resources
in response to unplanned events*
We have modelled disruption to our supply chain due to Covid-19 driven labour
shortages or out breaks leading to half of our manufacturing sites being closed
for a one week period on two occasions during the review window, including the
associated loss of sales, and taking into account the levels of stock held.
4
7
Retailer strategy results in
margin dilution*
We have modelled a reduction in gross margin for our UK business over the Viability
review period.
1
3
10
* Risk impact included in the Going Concern 12 month review period
The strategic report, set out on pages 07 to 58, has been approved by the Board.
By order of the Board
Simon Rose
General Counsel & Company Secretary
18 May 2022
The directors, in accordance with provision
31 of the UK Corporate Governance Code
2018, have assessed the viability of the
Group, taking into account the current
financial position, the Group’s strategic and
financial plan, and the potential impact
on profitability, liquidity and key financial
ratios of the principal risks documented on
pages 51 to 57. These factors have also been
carefully assessed in light of the Covid-19
pandemic and current global political and
economic uncertainty driven by the conflict
in Ukraine.
The directors have determined that three
years is the most appropriate period to
assess viability over, this timeframe is
consistent with the way the Board views
the development of the business over
the medium-term, and is appropriate for
both business planning and measuring
performance. The directors also considered
the nature of the Group’s activities and the
degree to which the business changes and
evolves in the relatively short term given the
dynamic nature of the FMCG sector when
determining the assessment period.
In order to report on the viability of the
Group, the directors reviewed the overall
funding capacity and headroom available
to withstand severe but plausible events
and carried out a robust assessment of the
principal risks facing the Group, including
those that would threaten its business
model, future performance, solvency or
liquidity. This assessment also included
reviewing mitigating actions in respect of
each principal risk.
The starting point for the viability
assessment is the Group’s strategic plan,
which was updated and approved by the
Board in March 2022. Sensitivity analysis was
applied to this base financial information
and the projected cash flows were stress
tested against a number of severe but
plausible scenarios, the viability assessment
being an extension of the going concern
assessment (see pages 115 and 116).
As of 2 April 2022, £175m of committed
borrowing facilities available to the Group,
were undrawn, the covenants linked to
the facilities are shown in note 19 of the
financial statements. Following the year end,
the Group completed the first extension of
the RCF to May 2025. The Board reviewed
the level of performance that would cause
the Group to breach its debt covenants and
considered all of the principal risks, focusing
on those which have the potential to
materially reduce Trading profit or adversely
impact the Group’s liquidity. The risks
considered to have the greatest potential
impact have been modelled in the downside
scenarios, further detail of which are shown
in the table below.
Consideration has been given to the impact
of climate change which identified an
increase in costs of advisors and regulatory
requirement within the assessment period,
best estimates for which are included in the
Group’s strategic plan and a sensitivity was
modelled as discussed above. An in-depth
assessment of climate risk is ongoing,
with further analysis of the key risks to be
conducted in the period to 1 April 2023.
Whilst this work is ongoing it is not believed
that the climate related risks would have a
significant impact on the business within the
three year viability review period. See pages
36 to 40 for an overview of the work related
to TCFD.
In assessing the Group’s viability, the Board
also considered all the severe but plausible
scenarios simultaneously materialising
and for a sustained period, in conjunction
with mitigating actions such as reducing
discretionary costs and capital investment.
The likelihood of the Group having
insufficient resources to meet its financial
obligations and breach its covenants is
unlikely under this scenario.
In addition, a reverse stress test was
conducted to identify the magnitude of
Trading profit decline required before the
Group breaches its debt covenant, which
indicates that a Trading profit decline
of broadly half in each year of the three
year review period is required to breach
covenants, which is considered extreme and
not plausible.
Based on this assessment, the Board
confirms that it has a reasonable expectation
that the Group will be able to continue in
operation and meet its liabilities as they
fall due over the three-year period to 29
March 2025.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 58
Governance framework 60
Board of directors 62
Governance overview 64
Nomination committee report 72
Audit committee report 75
Directors’ remuneration report 79
Other statutory information 96
Statement of directors’
responsibilities 99
Governance
No added sugar
Homepride sauces
As part of our commitment to
help consumers lead healthier
lifestyles, we have launched a
new range of no added sugar
Homepride pasta bake sauces.
Premier Foods plc
www.premierfoods.co.uk
 59
Governance framework
How our Governance framework supports the delivery of the Group’s strategic objectives
Our governance framework facilitates effective, entrepreneurial and prudent management that promotes the long-term success of the
Group, generates value for shareholders and contributes to all our stakeholders whether customers, consumers, suppliers, employees,
Nomination Committee
Responsible for Board appointments, succession planning and reviewing the structure, size and composition of
the Board, ensuring that there is a healthy balance of skills, knowledge, experience and diversity on the Board.
Provides oversight of Inclusion and Diversity, talent management and succession planning for the wider Group.
→ Further information can be found on pages 72 to 74
Chairman
The Chairman is responsible for the leadership of
the Board, ensuring its effectiveness and promoting
the highest standards of corporate governance. He
chairs Board meetings, ensuring timely and accurate
distribution of information and full review and
discussion of agenda items.
Senior Independent Director
The Senior Independent Director (SID) supports the
Chairman and leads the non-executive directors in
the oversight of the Chairman. He is also available to
shareholders if they have concerns that cannot be
raised through normal channels.
Board
Committees
Company
Secretary and
Internal Audit
Executive
Leadership
Team (ELT)
Company Secretary
The role of the Company Secretary is to ensure that there is an effective flow of information between executive
management and the Chairman and NEDs. The Company Secretary also advises the Board on legal and
governance matters and supports the Board evaluation process and induction programme.
Shareholders
Shareholders and other stakeholders
The Board delegates day-to-day responsibility for managing the business to the ELT and its sub-committees.
The ELT comprises the heads of the commercial business units and key corporate functions. The ELT meets
on a weekly basis and members regularly present to the Board.
ESG Governance Committee
→ Further information can be found on page 28
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 60
the government or wider society. The Board of directors is responsible for the governance of the Group. The responsibilities of the Board
include setting the Group’s purpose, values and strategy, providing the leadership to put them into effect, supervising the management of
the business, monitoring performance and reporting to shareholders on their stewardship.
Audit Committee
Monitors the integrity of the Group’s external reporting and
provides oversight and governance of the Group’s internal
controls, risk management and the relationship with external
auditors.
→ Further information can be found on pages 75 to 78
Remuneration Committee
Responsible for setting the remuneration policy and individual
compensation for the Chairman, executive directors and
senior management, to ensure that it is aligned with the
Group’s strategic objectives and culture and also reviews the
remuneration of the wider workforce.
→ Further information can be found on pages 79 to 95
Non-executive Directors
(‘NEDs’)
The NEDs bring a range of
knowledge and experience to
the Board. Their role is to use
their experience, objectivity
and sound judgement to
scrutinise and challenge
executive management’s plans
and performance and the
development of the Group’s
vision, values and strategy.
Workforce Engagement
NED
The Workforce Engagement
NED role is to engage
with colleagues across the
business to ensure their views
and concerns are brought
to the Board and taken into
account by the directors,
particularly when they are
making decisions that could
affect the workforce.
Chief Executive Officer
(’CEO’)
The CEO is responsible for the
day-to-day management of
the Group, working with the
Executive Leadership Team to
ensure the implementation of
the agreed strategy.
Chief Financial Officer
(’CFO’)
The CFO has responsibility for
developing and implementing
financial and operational
strategies, financial risk,
treasury management,
investor relations and
pensions.
Inclusion and Diversity Steering Group
→ Further information can be found on pages 12 and 13
TCFD Steering Group
→ Further information can be found on page 37
Shareholders and other stakeholders
Internal Audit
Internal Audit is responsible for providing the Audit Committee and Board with independent assurance on the Group’s control
framework and risk management.
→ Further information can be found on pages 76 and 77
Premier Foods plc
www.premierfoods.co.uk
 61
GOVERNANCE
Board of directors
Colin Day
Non-Executive Chairman
Alex Whitehouse
Chief Executive Officer
Duncan Leggett
Chief Financial Officer
Richard Hodgson
Senior Independent Director
Helen Jones
Non-Executive Director
Yuichiro Kogo
Non-Executive Director
Pam Powell
Non-Executive Director
Lorna Tilbian
Non-Executive Director
Appointed to the Board:
August 2019
Appointed to the Board:
August 2019
Appointed to the Board:
December 2019
Appointed to the Board:
January 2015 (appointed SID in
May 2019).
Appointed to the Board:
May 2020 (appointed Workforce
Engagement NED in September 2020).
Appointed to the Board:
March 2021
Appointed to the Board:
May 2013 (appointed Chair of the
Remuneration Committee in May 2019).
Appointed to the Board:
April 2022
Skills and experience: Colin retired
as Chief Executive of Essentra plc in
2017, was previously Chief Financial
Officer at Reckitt Benckiser plc for
over 10 years and prior to that at
Aegis Group plc. He has served as
a non-executive director on the
boards of major UK plcs including
Amec Foster Wheeler, WPP, Cadbury,
Imperial Brands and easyJet.
Colin is currently a board member
of the Department for Environment,
Food and Rural Affairs and chairs
the Defra Audit and Risk Assurance
Committee. He is a non-executive
director and Audit Committee Chair
at Meggitt plc and Euromoney
Institutional Investor plc and a
non-executive director of FM Global.
He is also a member of the Board
and Finance Committee of Cranfield
University.
Colin is a Fellow of the Association
of Chartered Certified Accountants
and has an MBA from Cranfield
School of Management.
Skills and experience: Alex joined
the Company in July 2014 and
was appointed Managing Director
of the Grocery Strategic Business
Unit in September 2014. He was
promoted to UK Managing Director
in April 2017. Alex has significant
senior international, marketing,
sales, strategy, innovation and
general management experience
gained across multiple geographies.
He spent 18 years with Reckitt
Benckiser plc where he held
senior leadership roles including
Managing Director, New Zealand
and Worldwide Head of Shopper
& Customer Marketing. Earlier in
his career, he held a number of
retail management positions with
Whitbread plc.
Skills and experience: Duncan
joined the Company in September
2011 and has held a number
of senior roles within finance,
including, Group Financial Controller
and most recently Director of
Financial Control and Corporate
Development. Prior to joining the
Company, Duncan spent nine years
at KPMG, working with clients
across a variety of industries.
Duncan’s responsibilities include
operational and corporate finance,
corporate development, investor
relations and pensions. He is a
qualified Chartered Accountant.
Skills and experience: Richard
is Chief Executive Officer of The
Snowfox Group and has over 20
years’ experience in the food
industry. He was previously Chief
Executive Officer at Pizza Express,
a role he held for four years
until May 2017. In 2010 he was
appointed Commercial Director at
Morrisons, a newly created role,
combining Trading and Marketing.
Richard joined Waitrose in 2006
as Commercial Director, and prior
to that spent 10 years at Asda
holding a number of senior roles
culminating in his appointment as
Marketing & Own Brand Director.
Skills and experience: Helen brings
35 years of commercial and general
management experience for FMCG
and multi-site consumer businesses.
During her executive career, Helen
was previously Group Executive
Director of Caffe Nero Group Ltd
and Managing Director of Zizzi
restaurants. Prior to this, Helen
spent nine years at Unilever and was
the successful architect of launching
the Ben & Jerry’s brand in the UK
and Europe. Helen is currently
non-executive director and Senior
Independent Director of Halfords
plc and non-executive director and
Remuneration Committee Chair of
Fuller, Smith & Turner plc and Virgin
Wines UK PLC.
Skills and experience: Yuichiro is
Head of Business Development,
Deputy General Manager (Corporate
Planning Division) of Nissin Foods
Holdings Company Limited (“Nissin”)
and is responsible for devising Nissin’s
M&A strategy, as well as originating
and executing business alliance and
investment transactions. Prior to
joining Nissin, in September 2016, he
was Vice President at the Investment
Banking Division of Goldman Sachs
Japan Co., Ltd. During his nine years
at the firm, his key responsibilities
included execution of global equity /
debt financing transactions, as well as
coverage of corporate clients across
multiple industry sectors, including
technology, steel, and natural
resources. Yuichiro received a BA in
Economics from Keio University in
2001 and an MBA from the University
of Chicago in 2007.
Skills and experience: Pam has
more than 20 years’ marketing
experience developing some of
the world’s best known consumer
brands. Most recently, she was
the Group Strategy and Innovation
Director for SAB Miller, one of the
world’s leading brewers. Pam spent
nine years at SAB Miller, in senior
management roles, and prior to
that held numerous marketing
roles in the home and personal
care sector during a 13 year career
at Unilever plc, culminating in her
role as global Vice-President of the
Skin Care category. Pam is also a
non-executive director at Cranswick
plc and non-executive Chairman
of Barfoots Ltd, a privately owned
international farming and food
business.
Skills and experience: Lorna brings
with her, extensive experience
as an equity analyst covering the
media sector and an investment
banker with strong financial analysis
and leadership skills. During
her career, Lorna was executive
director and Head of the Media
Sector at Numis Corporation PLC,
until her retirement in 2018. She
was a founder of Numis, when it
launched in 2001, having previously
worked at Sheppards, as a director
at SG Warburg and an executive
director of WestLB Panmure. Lorna
is executive Chair of Dowgate
Capital Ltd, sits on the Advisory
Board of TechNation’s Future Fifty
programme and is a non-executive
director of Rightmove plc, Finsbury
Growth & Income Trust plc and
ProVen VCT plc.
Simon Bentley
Non-Executive Director
Roisin Donnelly
Non-Executive Director
Tim Elliott
Non-Executive Director
Tania Howarth
Non-Executive Director
Daniel Wosner
Non-Executive Director
Appointed to the Board:
February 2019 (appointed Chair of
Audit Committee in March 2019).
Appointed to the Board:
May 2022
Appointed to the Board:
May 2020
Appointed to the Board:
March 2022
Appointed to the Board:
February 2019 (having previously
served as a non-executive director from
March 2017 to March 2018).
Skills and experience: Simon is
Executive Chairman of UK mobile
cash operator Cash on the Move.
Simon has over 30 years’ experience
in finance and retail, having previously
served as Chairman and Chief
Executive of Blacks Leisure Group plc,
Acting Chairman/Senior Independent
Director of Frasers Group plc
(formerly Sports Direct International
plc), Chairman of Umberto Giannini,
and Deputy Chairman of Mishcon
de Reya. Earlier in his career, Simon
spent 10 years with accountancy firm
Landau Morley, latterly as a Senior
Partner. Simon is also Chairman of
Gingerbread, the leading national
charity working with single parent
families. He is a qualified Chartered
Accountant.
Skills and experience: Roisin has
over 30 years’ marketing and brand
building experience, gained at
Procter and Gamble, where she was
responsible for a large portfolio of
leading consumer brands within
the UK, Europe, EMEA and the
Americas during a varied career.
Most recently, she spent twelve
years as Chief Marketing Officer, UK
and Ireland and then two years in
the same role for Northern Europe
before leaving the Company in 2016.
Roisin has served as a non-executive
director of Just Eat plc, Holland &
Barrett Ltd and Bourne Leisure Ltd.
She is currently a non-executive
director of HomeServe plc and a
member of the Digital Advisory
Board of Coca-Cola Europacific
Partners.
Skills and experience: Tim has
nearly 40 years’ experience in
investment banking and corporate
finance, advising a wide range
of companies and industries,
particularly those in the consumer
and retail sectors. During his career,
Tim held Managing Director roles
at both Barclays Capital and JP
Morgan and, more latterly, was a
Partner and Consultant at KPMG.
Tim has deep knowledge and
experience of capital markets and is
currently Senior Adviser at Alvarez &
Marsal LLP.
Skills and experience: Tania
has extensive senior executive
experience from her roles across
global FMCG businesses. Until 2017,
she was Chief Operating Officer of
Nomad Foods, a European frozen
foods business listed on the NYSE,
with household brands such as Birds
Eye, Findus and Iglo. During her 10-
year tenure, she had responsibility
for Supply Chain, Quality, HR, IT
and M&A integration. Prior to
this, Tania was CIO for Coca-Cola’s
European and African businesses
and spent nine years at Walkers
Snack Foods, latterly as CIO. Tania
is currently non-executive Chair of
Ozo Innovations Ltd, a sustainable
hygiene solutions company; an
advisor to the Private Equity
business within Goldman Sachs
Asset Management; and a member
of the Technology Advisory Board at
NatWest Group plc.
Skills and experience: Daniel is
Managing Director & Head of
Europe at Oasis Management
Company Ltd. He joined Oasis in
2016, where he is also a member
of the firm’s Strategies Group and
Corporate Governance Group. As
Head of Europe, Daniel oversees the
firm’s UK and Continental European
investments. Prior to joining Oasis,
Daniel served as Head of the Asia
Pacific Equity Syndicate team at
Barclays in Hong Kong and, before
that, he worked with Barclays and
Lehman Brothers based in London.
Daniel, a UK national, received a
Bachelor of Arts in Politics from
Leeds University.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 62
Colin Day
Non-Executive Chairman
Alex Whitehouse
Chief Executive Officer
Duncan Leggett
Chief Financial Officer
Richard Hodgson
Senior Independent Director
Helen Jones
Non-Executive Director
Yuichiro Kogo
Non-Executive Director
Pam Powell
Non-Executive Director
Lorna Tilbian
Non-Executive Director
Appointed to the Board:
August 2019
Appointed to the Board:
August 2019
Appointed to the Board:
December 2019
Appointed to the Board:
January 2015 (appointed SID in
May 2019).
Appointed to the Board:
May 2020 (appointed Workforce
Engagement NED in September 2020).
Appointed to the Board:
March 2021
Appointed to the Board:
May 2013 (appointed Chair of the
Remuneration Committee in May 2019).
Appointed to the Board:
April 2022
Skills and experience: Colin retired
as Chief Executive of Essentra plc in
2017, was previously Chief Financial
Officer at Reckitt Benckiser plc for
over 10 years and prior to that at
Aegis Group plc. He has served as
a non-executive director on the
boards of major UK plcs including
Amec Foster Wheeler, WPP, Cadbury,
Imperial Brands and easyJet.
Colin is currently a board member
of the Department for Environment,
Food and Rural Affairs and chairs
the Defra Audit and Risk Assurance
Committee. He is a non-executive
director and Audit Committee Chair
at Meggitt plc and Euromoney
Institutional Investor plc and a
non-executive director of FM Global.
He is also a member of the Board
and Finance Committee of Cranfield
University.
Colin is a Fellow of the Association
of Chartered Certified Accountants
and has an MBA from Cranfield
School of Management.
Skills and experience: Alex joined
the Company in July 2014 and
was appointed Managing Director
of the Grocery Strategic Business
Unit in September 2014. He was
promoted to UK Managing Director
in April 2017. Alex has significant
senior international, marketing,
sales, strategy, innovation and
general management experience
gained across multiple geographies.
He spent 18 years with Reckitt
Benckiser plc where he held
senior leadership roles including
Managing Director, New Zealand
and Worldwide Head of Shopper
& Customer Marketing. Earlier in
his career, he held a number of
retail management positions with
Whitbread plc.
Skills and experience: Duncan
joined the Company in September
2011 and has held a number
of senior roles within finance,
including, Group Financial Controller
and most recently Director of
Financial Control and Corporate
Development. Prior to joining the
Company, Duncan spent nine years
at KPMG, working with clients
across a variety of industries.
Duncan’s responsibilities include
operational and corporate finance,
corporate development, investor
relations and pensions. He is a
qualified Chartered Accountant.
Skills and experience: Richard
is Chief Executive Officer of The
Snowfox Group and has over 20
years’ experience in the food
industry. He was previously Chief
Executive Officer at Pizza Express,
a role he held for four years
until May 2017. In 2010 he was
appointed Commercial Director at
Morrisons, a newly created role,
combining Trading and Marketing.
Richard joined Waitrose in 2006
as Commercial Director, and prior
to that spent 10 years at Asda
holding a number of senior roles
culminating in his appointment as
Marketing & Own Brand Director.
Skills and experience: Helen brings
35 years of commercial and general
management experience for FMCG
and multi-site consumer businesses.
During her executive career, Helen
was previously Group Executive
Director of Caffe Nero Group Ltd
and Managing Director of Zizzi
restaurants. Prior to this, Helen
spent nine years at Unilever and was
the successful architect of launching
the Ben & Jerry’s brand in the UK
and Europe. Helen is currently
non-executive director and Senior
Independent Director of Halfords
plc and non-executive director and
Remuneration Committee Chair of
Fuller, Smith & Turner plc and Virgin
Wines UK PLC.
Skills and experience: Yuichiro is
Head of Business Development,
Deputy General Manager (Corporate
Planning Division) of Nissin Foods
Holdings Company Limited (“Nissin”)
and is responsible for devising Nissin’s
M&A strategy, as well as originating
and executing business alliance and
investment transactions. Prior to
joining Nissin, in September 2016, he
was Vice President at the Investment
Banking Division of Goldman Sachs
Japan Co., Ltd. During his nine years
at the firm, his key responsibilities
included execution of global equity /
debt financing transactions, as well as
coverage of corporate clients across
multiple industry sectors, including
technology, steel, and natural
resources. Yuichiro received a BA in
Economics from Keio University in
2001 and an MBA from the University
of Chicago in 2007.
Skills and experience: Pam has
more than 20 years’ marketing
experience developing some of
the world’s best known consumer
brands. Most recently, she was
the Group Strategy and Innovation
Director for SAB Miller, one of the
world’s leading brewers. Pam spent
nine years at SAB Miller, in senior
management roles, and prior to
that held numerous marketing
roles in the home and personal
care sector during a 13 year career
at Unilever plc, culminating in her
role as global Vice-President of the
Skin Care category. Pam is also a
non-executive director at Cranswick
plc and non-executive Chairman
of Barfoots Ltd, a privately owned
international farming and food
business.
Skills and experience: Lorna brings
with her, extensive experience
as an equity analyst covering the
media sector and an investment
banker with strong financial analysis
and leadership skills. During
her career, Lorna was executive
director and Head of the Media
Sector at Numis Corporation PLC,
until her retirement in 2018. She
was a founder of Numis, when it
launched in 2001, having previously
worked at Sheppards, as a director
at SG Warburg and an executive
director of WestLB Panmure. Lorna
is executive Chair of Dowgate
Capital Ltd, sits on the Advisory
Board of TechNation’s Future Fifty
programme and is a non-executive
director of Rightmove plc, Finsbury
Growth & Income Trust plc and
ProVen VCT plc.
Simon Bentley
Non-Executive Director
Roisin Donnelly
Non-Executive Director
Tim Elliott
Non-Executive Director
Tania Howarth
Non-Executive Director
Daniel Wosner
Non-Executive Director
Appointed to the Board:
February 2019 (appointed Chair of
Audit Committee in March 2019).
Appointed to the Board:
May 2022
Appointed to the Board:
May 2020
Appointed to the Board:
March 2022
Appointed to the Board:
February 2019 (having previously
served as a non-executive director from
March 2017 to March 2018).
Skills and experience: Simon is
Executive Chairman of UK mobile
cash operator Cash on the Move.
Simon has over 30 years’ experience
in finance and retail, having previously
served as Chairman and Chief
Executive of Blacks Leisure Group plc,
Acting Chairman/Senior Independent
Director of Frasers Group plc
(formerly Sports Direct International
plc), Chairman of Umberto Giannini,
and Deputy Chairman of Mishcon
de Reya. Earlier in his career, Simon
spent 10 years with accountancy firm
Landau Morley, latterly as a Senior
Partner. Simon is also Chairman of
Gingerbread, the leading national
charity working with single parent
families. He is a qualified Chartered
Accountant.
Skills and experience: Roisin has
over 30 years’ marketing and brand
building experience, gained at
Procter and Gamble, where she was
responsible for a large portfolio of
leading consumer brands within
the UK, Europe, EMEA and the
Americas during a varied career.
Most recently, she spent twelve
years as Chief Marketing Officer, UK
and Ireland and then two years in
the same role for Northern Europe
before leaving the Company in 2016.
Roisin has served as a non-executive
director of Just Eat plc, Holland &
Barrett Ltd and Bourne Leisure Ltd.
She is currently a non-executive
director of HomeServe plc and a
member of the Digital Advisory
Board of Coca-Cola Europacific
Partners.
Skills and experience: Tim has
nearly 40 years’ experience in
investment banking and corporate
finance, advising a wide range
of companies and industries,
particularly those in the consumer
and retail sectors. During his career,
Tim held Managing Director roles
at both Barclays Capital and JP
Morgan and, more latterly, was a
Partner and Consultant at KPMG.
Tim has deep knowledge and
experience of capital markets and is
currently Senior Adviser at Alvarez &
Marsal LLP.
Skills and experience: Tania
has extensive senior executive
experience from her roles across
global FMCG businesses. Until 2017,
she was Chief Operating Officer of
Nomad Foods, a European frozen
foods business listed on the NYSE,
with household brands such as Birds
Eye, Findus and Iglo. During her 10-
year tenure, she had responsibility
for Supply Chain, Quality, HR, IT
and M&A integration. Prior to
this, Tania was CIO for Coca-Cola’s
European and African businesses
and spent nine years at Walkers
Snack Foods, latterly as CIO. Tania
is currently non-executive Chair of
Ozo Innovations Ltd, a sustainable
hygiene solutions company; an
advisor to the Private Equity
business within Goldman Sachs
Asset Management; and a member
of the Technology Advisory Board at
NatWest Group plc.
Skills and experience: Daniel is
Managing Director & Head of
Europe at Oasis Management
Company Ltd. He joined Oasis in
2016, where he is also a member
of the firm’s Strategies Group and
Corporate Governance Group. As
Head of Europe, Daniel oversees the
firm’s UK and Continental European
investments. Prior to joining Oasis,
Daniel served as Head of the Asia
Pacific Equity Syndicate team at
Barclays in Hong Kong and, before
that, he worked with Barclays and
Lehman Brothers based in London.
Daniel, a UK national, received a
Bachelor of Arts in Politics from
Leeds University.
Committee membership:
Audit committee
Remuneration committee
Nomination committee
Committee chair
Independent
Premier Foods plc
www.premierfoods.co.uk
 63
GOVERNANCE
Governance overview
Chairman’s introduction
Dear shareholder
On behalf of the Board, I would like to introduce the Group’s
corporate governance statement for FY21/22.
Board leadership
The Board leads the Group’s governance structure. It provides
stewardship of the Company with the purpose of safeguarding its long-
term sustainable success, creating value for the Group’s shareholders
and other stakeholders, and enabling the Group to make a positive
contribution to the communities and wider societies in which it
operates.
Purpose, values and culture
One of the Board’s responsibilities is to assess and monitor culture,
to ensure it is aligned with the Group’s strategy. Over the last few
years, significant progress has been made in embedding the Group’s
values across the business, increasing investment in communication
and engagement with colleagues, and up-weighting training in
areas such as leadership and Inclusion and Diversity. Progress is
monitored via regular HR updates, Group-wide colleague surveys,
site visits by the Board, issues raised in whistleblowing helpline
calls, colleague retention levels and through the work of the
Workforce Engagement NED.
The Board reviewed the Group’s purpose, values, strategy and culture
as part of the review and approval of the Group’s five-year strategic
plan in April 2021, and the launch of the Group’s new purpose and
strengthened ESG strategy in October 2021. The Board’s effectiveness in
monitoring the culture and behaviours throughout the organisation was
also considered as part of this year’s internal Board evaluation and rated
positively.
Group strategy
The Board has an important role to play in reviewing and approving
the Group’s strategy and in providing effective oversight of the
implementation of the key elements of the strategy, in order to deliver
long-term sustainable growth. Over the year, the Board has reviewed
the Group’s five-year strategic plan and the key steps to deliver the
stretching growth pans.
To aid focus on the delivery of the Group strategic priorities, the
Board reviewed the structure of meetings and agenda items. A
number of changes were made to reduce the quantity of reports and
their length, in order to enhance the balance of time spent reviewing
operational performance and allow more time for forward looking
matters, such as innovation, investment and growth initiatives. In
addition, reflecting the increased size of the Board, it was considered
appropriate to review the structure of Committee membership and
details of the new membership, which will take effect from the end of
the 2022 AGM, are set out in the table opposite.
→ Read more about Strategy on pages 14 and 15.
ESG strategy and climate risks
The Board has overall responsibility for the Group’s ESG strategy
and for the oversight of the climate-related risks the business faces
as a major UK food manufacturer.
The Board approved a strengthened ESG strategy, the Enriching Life
Plan, which was launched in October 2021. Following a materiality
study with key stakeholders, the Group’s priorities are now focussed
in three areas: Product, Planet and People. The Board delegates
day-to-day management of the ESG strategy to the ESG Governance
Committee, which is chaired by the CEO and supported by the ESG
Director, members of the ELT and subject matters experts from across
the Group. Regular updates are provided by the CEO. The Board
reviews ESG strategy on a biannual basis and progress against ESG
targets are reported at each scheduled Board meeting.
Climate related risks are incorporated into the Group’s Enterprise
Risk Management framework. This ensures a bottom-up approach
to identifying and quantifying risks for prioritisation, as well
as oversight through appointed members of the ELT, the Audit
Committee, and ultimately the Board. ESG matters and climate risks
are also taken into account by the Board when making key decisions
as part of its responsibility to consider matters under Section 172 of
the Companies Act.
→ Read more about the Enriching Life Plan on pages 24 to 35.
Governance and risk
The Board is responsible for the oversight of risk and for setting
the Group’s risk appetite. In doing so, it ensures that the necessary
resources are in place for the Company to meet its objectives and
to measure its performance. The Board has established a robust
governance and risk framework, which has been devised to ensure
that each business is being operated and managed appropriately,
and that prudent and effective controls are in place to identify
emerging and principal risks and to manage or mitigate those risks.
The Board noted that the overall cyber security landscape remained
challenging with increasing levels of ransomware attacks across the
industry. The Board received regular updates on the Group’s IT strategy
and management actions to strengthen resilience. This included
investment in technology to strengthen security, penetration testing
of the Group’s cloud computing environment and the investment in
strengthening security within the Group’s manufacturing sites.
→ Read more about risk management on pages 51 to 57.
Workforce engagement
The Board and its committees receive regular updates on workforce
matters, and this is a standing item reported to the Board via regular
HR reports. This includes updates on key issues, such as site-based
pay negotiations, vacancies and recruitment, the review of talent
management and succession plans, the results of periodic employee
engagement exercises and action plans to address the issues raised.
These activities are enhanced by the work of the Remuneration
and Audit Committees, which review remuneration arrangements
for the workforce across the business and the issues raised via the
Company’s confidential whistleblowing helpline and management’s
response to them. During the year, the Group undertook a Group-wide
engagement survey which had an 88% response rate. The Board will
review the results of the survey, management’s plans to address issues
raised and monitor progress against this over the coming year.
Helen Jones, as the Company’s Workforce Engagement NED, has an
important role in fostering effective engagement with the workforce to
enable the Board to be kept informed of the views of the workforce, and
ensure these views are taken into consideration as part of the Board’s
decision-making process. Voice Forums have been established at sites
across the business and, during the year, Helen attended meetings at a
number of sites, and the results of these meetings fed back to the Board.
The importance of social distancing measures and enhanced hygiene
protocols in place at sites and their impact on mitigating infection rates
was noted. Updates were provided on work being undertaken at sites in
regard to inclusion and diversity, mental health issues, health and safety
and the focus on community and charity work. Investment in factory
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 64
infrastructure was discussed, along with
the ongoing challenges posed by Covid-19
restrictions, supply chain challenges and labour
shortages.
Compliance with the UK Governance
Code 2018
The Board supports the principles laid down
by the UK Governance Code 2018 (the
Governance Code) as issued by the Financial
Reporting Council, which applies to accounting
periods beginning on or after 1 January 2019
(available at www.frc.org.uk).
The Company has not formally consulted
with the wider workforce on executive
remuneration over the course of the year, but
has agreed that this area will be covered as
part of the Workforce Engagement NED’s remit
going forward.
After a review of post cessation
shareholdings for executive directors, the
Remuneration Committee and the Board
concluded that sufficiently robust retention
measures exist under the current plan rules
to ensure a significant number of shares are
held post cessation and, therefore, it was
not recommended to introduce a formal
policy (this is discussed in more detail in
the Directors’ Remuneration report on
page 87).
The Board considers it has been in compliance
with the requirements of the Governance
Code during the financial year, with the
exception of the matters highlighted above.
Annual General Meeting (AGM)
We understand the importance of the
AGM to shareholders and value the
opportunity to meet in person. However,
the health and safety of our shareholders,
employees and the broader community is
of paramount importance and, therefore,
it was not possible for shareholders to
attend our AGM in 2021, as a consequence
of Government guidelines on public
gatherings.
This year, we are pleased to be able to
welcome shareholders to the AGM, which
will be held at our head office, Premier
House, Centrium Business Park, Griffith’s
Way, St Albans AL1 2RE on Wednesday
20 July 2022 at 11.00 am. I look forward to
meeting with shareholders then.
Colin Day
Non-executive Chairman
18 May 2022
Board attendance
During the year there were 9 scheduled meetings of the Board, and four meetings of the
Audit Committee, five meetings of the Remuneration Committee and three meetings of the
Nomination Committee. In addition, a number of other Board and Committee meetings and
calls were convened for specific business.
All directors are expected to attend the AGM, scheduled Board meetings and relevant
Committee meetings, unless they are prevented from doing so by prior commitments.
Where a director is unable to attend a meeting they have the opportunity to read the
papers and ask the Chairman to raise any comments. They are also updated on the key
discussions and decisions which were taken at the meeting. Non-executive directors also
have the opportunity to meet without management present.
Details of Board and Committee membership and attendance at scheduled Board meetings
and Committee meetings are set out in the table below.
As shareholders will be aware, as a result of the UK Government’s guidance on public
gatherings at the time due to the Covid-19 pandemic, it was concluded that only the
directors could attend the 2021 AGM in person, with shareholders invited to join via
webcast.
Pam Powell was unable to attend one Audit Committee and one Nomination Committee
meeting, due to other business commitments which could not be rescheduled. Tania
Howarth and Lorna Tilbian were appointed as non-executive directors on 1 March and
1 April 2022, respectively. Roisin Donnelly was appointed a non-executive director on 1 May
2022, following the end of the financial year.
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Executive directors
Alex Whitehouse 9/9 – – –
Duncan Leggett 9/9 – – –
Non-executive directors
Colin Day 9/9 – – 3/3
Richard Hodgson 9/9 4/4 5/5 3/3
Simon Bentley 9/9 4/4 5/5 3/3
Roisin Donnelly – – – –
Tim Elliott 9/9 4/4 5/5 3/3
Tania Howarth 2/2 1/1 2/2 1/1
Helen Jones 9/9 4/4 5/5 3/3
Yuichiro Kogo 9/9 – – –
Pam Powell 9/9 3/4 5/5 2/3
Lorna Tilbian 1/1 – – N/A
Daniel Wosner 9/9 – – –
Committee membership, with effect from the end of the AGM on 20 July 2022, will be
as follows:
Nomination Committee Audit Committee Remuneration Committee
Colin Day (Chair) Simon Bentley (Chair) Helen Jones (Chair)
Richard Hodgson Roisin Donnelly Roisin Donnelly
Tania Howarth Tim Elliott Tim Elliott
Lorna Tilbian Tania Howarth Richard Hodgson
Premier Foods plc
www.premierfoods.co.uk
 65
GOVERNANCE
Governance overview CONTINUED
Conflicts of interest
The Group has procedures in place for
managing conflicts of interest and directors
have continuing obligations to update the
Board on any changes to these conflicts.
This process includes relevant disclosure at
the beginning of each Board meeting and
also the Group’s annual formal review of
potential conflict situations, which includes
the use of a questionnaire.
Under our Relationship Agreements with
Nissin (who held 19.1% of issued share
capital as at 2 April 2022) and Oasis (who
held 8.9% of issued share capital as at
2 April 2022), each is entitled to nominate
an individual for appointment to the
Board. For Nissin, this is conditional upon
them retaining an interest in shares in the
Company (representing 15% of issued share
capital). A new relationship agreement was
signed with Oasis in January 2021. There
is no longer a shareholding requirement
and the appointment can be terminated
by either party giving five business days’
notice. A summary of the principal terms of
both relationship agreements can be found
on the Company’s website. During the
period to 2 April 2022, no other director
had a material interest at any time, in any
contract of significance with the Company
or Group other than their service contract
or letter of appointment.
Induction
All directors receive a tailored induction on
joining the Board covering their duties and
responsibilities as directors. Non-executive
directors also receive a full briefing on all
key areas of the Group’s business and they
may request further information as they
consider necessary. A typical induction
would include meetings with Board
colleagues, the ELT and key management,
site visits and an induction on directors’
duties, key elements of the Listing Rules,
DTRs and Market Abuse Regulation and the
operation of the Board and its Committees.
Board information
The main source of information provided
to directors is via the Board papers which
are designed to keep directors up to date
with all material business developments
in advance of Board meetings. In addition,
training on specific issues is provided as and
when required. Non-executive directors
also meet with senior management outside
of Board meetings to discuss specific areas
of interest in more detail, e.g. brand and
marketing plans, customer strategy and
pension investment strategy. The Board
pack generally contains the following
standing items: CEO business review; CFO review (incorporating Investor Relations and
Treasury), Financial dashboard and KPIs, Commercial and Performance review, Health
and Safety, and ESG performance. In addition, there are quarterly, biannual and periodic
updates on a range of matters such as: Human Resources; diversity; talent management;
corporate affairs; commercial updates; new product development; customer service levels;
operations and logistics; ESG strategy; strategic projects; and capital expenditure.
Terms of reference
During the year, the Board reviewed the Matters reserved for the Board, and the terms
of reference for each of its committees, to update them with recent developments in
corporate governance and best practice. The Committees terms of reference can be found
on the Group’s website.
Key Board activities in the year
Set out below are details of the key areas of focus over the course of the financial period.
Strategic development & implementation
• Approved a new five-year strategic plan for the Group and the revised Group
strategy to implement this plan and undertook a detailed review of the Group’s
business plans for the medium-term.
• Approved the Group’s new purpose of Enriching Life Through Food.
• Received regular updates on progress against the key elements of Group strategy.
• Monitored the investment strategy, investment performance and funding levels of
the Group’s defined benefit pension scheme.
• Monitored the implementation of the revised strategy to return the International
business to long-term sustainable growth.
• Reviewed NPD strategy and initiatives.
Operational performance
• Monthly trading updates from the UK and International businesses.
• Received regular updates on external matters impacting the Group including the
ongoing impact of the Covid-19 pandemic on the business and key stakeholders,
issues impacting the availability of labour and HGV drivers and the impact of
inflation.
Financial performance & risk
• Approval of budget, re-forecasts and monthly management accounts.
• Reviewed medium-term financing, including the extension of the Group’s revolving
credit facility with an updated banking Group and the issue of new Senior Secured
Fixed Rate Notes.
• Reviewed key risks facing the business, including environmental risks, emerging risks
and the risk appetite of the business.
• Reviewed cyber security and resilience of IT the Group’s strategy to enhance
processes and procedures.
• Reviewed viability statement over the next three years.
• Approved Half Year and Full Year results.
• Approved Q1 and Q3 trading statements.
• Reviewed annual report to confirm it is fair, balanced and understandable.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 66
Governance & culture
• Reviewed diversity within the Board
for the wider group
• Assessed the feedback from the
annual Board and committee
evaluations.
• Updates from the Workforce
Engagement NED.
• Review of governance best practice
and the Governance Code.
Responsibility & sustainability
• Reviewed and approved the Group’s
strengthened ESG Strategy, the
Enriching Life Plan, the governance
structure for ESG and the targets set
under each of the three pillars.
• The Board reviewed the Group’s
approach to Health and Safety,
product safety and trends and issues
relating to nutrition, modern day
slavery, gender pay, Inclusion and
Diversity and plastic packaging.
Board allocation of time
over the year
Strategic development
& implementation: 27%
Operational performance: 18%
Financial performance & risk: 30%
Environmental, Social and Governance
(including employees and H&S): 25%
(As at 2 April 2022)
Board and committee evaluation
The Board conducts a three-year rolling evaluation process, which normally follows the
following format:
Year 1
An externally facilitated evaluation is carried out to assess the effectiveness of the
Board, each committee and the Chairman. The input of each Board member is kept
confidential to foster open, honest and in-depth feedback. A report is presented to the
Board and an action plan drawn up. An externally facilitated evaluation was undertaken
in FY19/20 by Lintstock (who have no other connection with the Company).
Years 2 and 3
An internally facilitated evaluation is managed by the Company Secretary. A
questionnaire is prepared by the Company Secretary, in conjunction with the Chairman,
focusing on core responsibilities of the Board. It also builds on the key development
areas identified in the prior year. The input of each Board member is kept confidential
to foster open, honest and in-depth feedback. A report is presented to the Board and an
action plan drawn up.
FY21/22 evaluation
This is the third year of the three-year rolling evaluation process and, therefore, an
internally facilitated evaluation was undertaken. Questionnaires, were prepared by
the Company Secretary, in conjunction with the Chairman, covering a wide range of
areas, building on the previous year’s evaluation. The review covered the Board, its
Committees and the Chairman, CEO and CFO. Additional areas were added to cover the
Board’s oversight of the Group’s ESG strategy and the identification and understanding
of environmental risks and opportunities. The responses were compiled and presented
to the Board and Committees for review, and action plans to address areas highlighted
by the evaluation for focus over the forthcoming year were approved.
Outcomes from the FY21/22 evaluation
Overall, the responses to the Board and Committee questions were very positive and
demonstrated that the Board had strong foundations and remains well placed to deal
with future challenges. The review noted the challenges which the Board had faced, along
with much of the wider business, in not being able to meet face-to-face for many months.
However, the responses confirmed that meetings were being conducted in a positive and
constructive way, with an appropriate balance of skills represented. Relationships, both
between Board members and with the ELT, were felt to be strongly positive, allowing
good engagement. Board composition and Board dynamics, the oversight of culture and
understanding of stakeholders, were all rated highly. The performance of the Chairman was
considered to be highly effective, having developed strong relationships with directors and
shareholders and it was confirmed that the Board and its Committees continued to operate
effectively. In addition, it was noted that the executive management team had performed
well over the year and continued to maintain positive relationships with the rest of the
Board and had been very effective at implementing the Group’s strategy, reporting on
business performance and highlighting key issues.
Premier Foods plc
www.premierfoods.co.uk
 67
GOVERNANCE
Governance overview CONTINUED
Following the review, led by the Chairman, it was agreed that the
Board’s priorities over the next 12 months should be as follows:
• Strategy – Execution of the Company’s 5-year strategic plan,
with a particular focus on:
• International;
• Customer preferences around health and wellness;
• M&A and other strategic partnerships; and
• The digital landscape.
• Insights – Maintain focus on ESG risks and opportunities and
changing consumer preferences, including how the Group’s
brands can respond to them and the level of investment
required.
• Stakeholders – Build its understanding of key stakeholders and
gain further insight into consumer trends and key customer and
supplier relationships.
• Board Balance – Continue to monitor the balance of diversity
within the Board and wider business and continue to assess the
balance of skills on the Board to ensure it supports the Group’s
strategy.
• Culture – Advance the Board’s oversight of culture and
inclusivity within the Group through the Voice Forums,
appraising the results of employee engagement surveys,
Inclusivity & Diversity updates and encouraging best practice
and alignment with the Group’s purpose of Enriching Life
Through Food.
Assessment of Chairman’s performance
As part of the annual Board evaluation process, Richard Hodgson,
the Senior Independent Director, (‘SID’), led a review of the
Chairman’s performance. A meeting was held with the other
non-executive directors, without the Chairman being present. The
review focused on the relationship between the Chairman and the
CEO, the overall leadership of the Board, the governance process,
the conduct of Board meetings and the quality of debate. In
addition, the Chairman’s relationship with major shareholders and
his understanding of their priorities were discussed.
A summary of the key findings was shared at a subsequent meeting
between the SID and the Chairman. It was also noted that the
Chairman had no other significant external commitments and was
able to dedicate sufficient time to the role.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 68
Stakeholder engagement and section 172(1) statement
Our approach
The Board is responsible for leading shareholder engagement. Like many major UK businesses, the Group operates in a complex and
interconnected commercial and regulatory environment which impacts and touches many different stakeholders. By understanding and
engaging with stakeholders, the Board can consider their interests and priorities when making key decisions.
This also aligns with our purpose of Enriching Life Through Food for our consumers, our planet and our colleagues, and ensures that we
work constructively with stakeholder to deliver value creation and promote the long-term sustainable success of the Group.
The table on pages 70 and 71 sets out our key stakeholders and our engagement with them.
Enriching Life Plan The Board has overall oversight for the Group’s ESG strategy and, over the year, reviewed and approved a
strengthened strategy, the Enriching Life Plan, which was launched in October 2021.
This process began with a materiality assessment to engage with our stakeholders to understand their views on
the most important ESG issues and where they saw Premier Foods could make the biggest difference. In-depth
interviews were held with a number of our customers, members of our investor community, NGOs, policy experts,
and our colleagues, with the aim to understand and prioritise ESG issues most relevant to our business and our
stakeholders, and incorporate sustainability risks into our existing risk management processes.
This resulted in the identification of the key areas which the Group will focus on, aligned with our purpose of
Enriching Life Through Food. These have been gathered into three main pillars: making nutritious and sustainable
food, contributing to a healthier planet and nourishing the lives of our colleagues and communities.
The Group has also set a number of challenging targets, including a commitment to achieve net zero for our Scope
1 & 2 emissions by 2040. The Enriching Life Plan has been welcomed by stakeholders and we look forward to
working with customers, the food industry and NGOs, as we focus on delivery of targets over the coming years.
The Board also reviewed the governance structure for ESG and the establishment of a new ESG Governance
Committee, chaired by the CEO and made up of relevant members of the Executive Leadership Team, including
the CFO and Corporate Affairs and ESG Director. The committee is responsible for managing the various ESG
programmes and ensuring ESG is embedded into how we do business. The CEO reports on progress against key
matters as part of his Board updates, ESG KPIs are tracked at each meeting and ESG strategy is presented to the
Board on a biannual basis.
→ Read more about the Enriching Life Plan on pages 24 to 35.
Covid-19 Over the year, the Group’s priority has remained to protect the health and wellbeing of colleagues and other
stakeholders, and the Board has closely monitored progress through regular updates from the CEO and via Health
and Safety updates at each board meeting.
The Group continued to maintain a range of health, safety and hygiene protocols at our factories, offices and
across our supply chain. These included enhanced hygiene controls, social distancing, working from home
(where possible) and controlled access to manufacturing sites. We carried out individual risk assessments for
all colleagues classed as vulnerable or clinically extremely vulnerable and, should a colleague test positive or be
required to self-isolate, we provided full pay. Extensive two-way communication has been used across the business
to keep colleagues up to date with changes and to provide assurance and to address any areas of concern. The
Board believes the measures taken by management have been highly effective in minimising the number of
infections experienced at our sites and enabled the Group’s manufacturing and logistics operations to remain fully
operational throughout the year.
Dividend As part of its review of the Group’s financing, balance sheet and budget, the Board considers capital allocation
and the importance of balancing the needs for investment in the business, debt servicing, and the requirements
of shareholders and pension schemes. The Board is conscious of the importance of dividend payments for
shareholders and, over the last few years, the Company has made significant progress in deleveraging the business
and reducing Net debt to a level which now enables the payment of a dividend (see KPIs on page 21). In February
2021, the Company completed a capital reduction in order to provide greater flexibility in how the Company
manages its capital resources going forward. As a result of this, the Company was able to pay a dividend of 1.0
pence per share to shareholders on 30 July 2021. This represented the first dividend payment by the Company
since 2008, and further demonstrates the improved strength of the business and the continued delivery of its
growth strategy.
Premier Foods plc
www.premierfoods.co.uk
 69
GOVERNANCE
Governance overview CONTINUED
Customers and consumers Colleagues Suppliers
Communities and
environment
Government and
society
Bond holders, bank and
pension schemes
Shareholders, investors
and analysts
Why these stakeholders are important to our business
Customers and consumers buy and eat our
products – they are at the heart of the
Group’s business model.
We have an experienced and dedicated workforce of
over 4,000 colleagues at 15 sites across the UK. We
have a responsibility to ensure all colleagues work in
a safe environment and have opportunities to learn
and develop in their careers.
We are one of Britain’s largest food
manufacturers and we are proud to work
with many British suppliers. Over the year,
84% of our total third party spend was
with UK based suppliers.
As a responsible food manufacturer,
we consider the impact we have in
the areas we operate, including local
businesses, residents and charities.
We also have an important role to
play in ensuring we reduce our impact
on the environment.
The Board believes in the
importance of acting responsibly
and operating with high standards
of business conduct. The Group
also takes an active role in seeking
to shape and influence debates
around key issues in society
relating to food safety, nutrition
and health & well-being issues.
The Group’s banks, bond holders
and lending group provide essential
financing that supports the long-term
viability of the Group. The Group also
has a large defined benefit pension
scheme, with approximately 43,000
pensioners and deferred pensioners,
who depend on the Group’s long-
term ability to fund the schemes.
An important role of the Board
is to represent and promote the
interests of its shareholders, as well
as being accountable to them for
the performance and activities of
the Group
Issues and factors which are most important to these stakeholders
• Category leadership
• Excellent customer service levels
• Innovative, relevant products which meet
consumers’ needs
• Great tasting products
• Convenient and responsible packaging
formats
• Environmental, nutritional and
sustainability issues
• Understanding our purpose, strategy and values
• Reward and recognition
• Safe and pleasant working conditions
• Learning and development opportunities
• Health and well-being
• Inclusion and Diversity
• Understanding the Group’s strategy
and growth plans
• Forming long-term collaborative
partnerships
• Transparent terms of business
• Fair payment terms
• How our factories impact on local
communities
• Volunteering and supporting
charities
• Reducing carbon emissions
• Environmental commitments
• Plastic packaging
• Food safety
• Nutrition
• Tax
• Conducting business in
a fair way
• Being kept up to date with
Group’s strategy and trading
performance
• Cash flow and Net debt levels
• The strength of our employer
covenant
• Ongoing schedule of
contributions
• Shareholder return over the
medium-term
• Good governance and
stewardship of the Group
and its brands
• Delivery of financial
performance
• Deleveraging the business
• Dividends
Engagement and outcomes
We seek to develop sustainable partnerships
with our customers focused on driving mutual
category growth. Regular meetings take place
at many levels, through the sales team, senior
management and CEO. These cover range
reviews, new products, promotions, displays
and service levels. Feedback from customers is
also provided via an annual customer survey.
Customer insights, from a number of channels,
are shared and discussed at Board meetings,
including details on consumer behaviours,
market trends and competitor activities.
Product tastings and NPD are showcased at
Board meetings. Customer and consumer
feedback is reported to the Board via KPIs.
It is essential that we engage with our
consumers so that we can understand
consumption and lifestyle trends in order to
help us to create products that meet their
needs. We also regularly benchmark our
products with consumers in blind panel tests.
We communicate and engage with colleagues in many
ways to ensure they understand our business priorities
and performance. This ensures that, in turn, we can
listen to their issues and concerns.
We have regular Company briefings led by the CEO and
shared by video feed to all sites across the Group. There
are regular site briefings from management to give
presentations and listen to feedback, supplemented
by ELT and Board visits.
Feedback is received via Group employee surveys, line
management and HR teams, resulting in targeted action
plans to address key areas for improvement. The Board
receives regular updates on key employee issues and
internal communications.
To increase the focus on two-way communication
the Workforce Engagement NED regularly attends
employee forums to discuss key issues directly with
colleagues.
A formal whistleblowing procedure is in place to allow
employees to raise any concerns or issues they have
confidentially and details of all cases raised are fed
back to the Board via the Audit Committee
It is crucial that we develop strong
relationships with our suppliers, based upon
mutual trust and respect, to ensure that we
can source high quality ingredients at the
right price.
We have open, constructive and effective
relationships with suppliers through regular
meetings which provide both parties the
ability to feed back on successes, challenges
and our ongoing strategy.
Regular audits of suppliers are undertaken
to ensure compliance with ethical sourcing
standards. Feedback from suppliers is
also provided via feedback surveys. The
Company’s whistleblowing hotline has been
extended to cover suppliers to allow them to
raise any concerns anonymously.
Key supplier contracts are discussed by the
Board as appropriate.
Payment policies, practice and performance
are reported through the Government’s
Payment Practices Reporting portal
Updates are provided to the Board
on ESG (Environmental Social and
Governance) matters affecting the
business, so that the long-term
sustainability of the Group can be
considered in its decision-making.
The Board receives updates on KPIs
relating to our economic contribution
and environmental impact, as well as
our contributions to the community,
both at a local site level and via the
work we do with our corporate charity
partners.
During the year, the Board reviewed
and approved a new ESG strategy,
the Enriching Live Plan, based around
three pillars: Product, People and
Planet.
The Board receives regular
updates from the Corporate Affairs
& ESG Director on key regulatory
issues affecting the Group and the
food industry, such as nutritional
guidelines, advertising and
promotions.
The General Counsel & Company
Secretary provides updates on
governance, legal, regulatory and
compliance matters.
We seek to take an active role
in responding to the key issues
affecting our industry, through
membership of organisations
such as the Institute for Grocery
Distribution and the Food and
Drink Federation.
Management engages regularly with
the Group’s lenders, bond holders
and banking group via conference
calls, conferences and face-to-face
meetings.
During the first half of the year, the
Group completed the refinancing
of a new Revolving Credit Facility
(‘RCF’) with a refreshed bank Group,
extending the maturity to at least
2024. In addition, we launched a
new £330m Fixed Rate Bond due
October 2026, resulting in significant
interest cost savings. This has helped
to increase cash flow and further
reduce Net debt. Following the year
end, the Group completed the first
extension of the new RCF to 2025.
The CFO maintains a regular dialogue
via attendance at Trustee and
Investment Committee meetings
and regularly reports on the Group’s
trading performance. Periodic
updates are provided to the Board
on funding levels and investment
strategy.
The Board believes it is very
important to engage with its
shareholders and does this in a
number of ways.
This includes the financial results
presentations and conference calls
for shareholders and analysts, face-
to-face meetings, investor road
shows and anonymous shareholder
feedback via brokers. The Chairman
and CEO meet regularly with
shareholders to discuss strategic
and governance matters. The Chair
of the Remuneration Committee
also engages with shareholders
in connection with remuneration
matters.
Board members also have
the opportunity to meet with
private shareholders at the
Company’s AGM.
The Group has been able to
reinstate dividend payments for
the first time since 2008, with the
payment of a final dividend to
shareholders in July 2021.
Further information
→ Read more on Making nutritious and
sustainable food on pages 30 and 31.
→ Read more on Nourishing the lives of our colleagues
and communities on pages 34 and 35.
→ Read more on Contributing to a healthier planet on
pages 32 and 33.
→ Read more on Responsible business’
practices on page 29.
→ Read more on Nourishing the lives
of our colleagues and communities
on pages 34 and 35
→ Read more on Contributing to a
healthier planet on pages 32 and 33
→ Read more on Responsible
business’ practices on page 29
→ Read more on Net debt and free
cash flow KPIs on pages 20 and
21.
→ Further details of the refinancing
on page 45.
→ Read more on Engagement with
shareholders on page 81.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 70
Customers and consumers Colleagues Suppliers
Communities and
environment
Government and
society
Bond holders, bank and
pension schemes
Shareholders, investors
and analysts
Why these stakeholders are important to our business
Customers and consumers buy and eat our
products – they are at the heart of the
Group’s business model.
We have an experienced and dedicated workforce of
over 4,000 colleagues at 15 sites across the UK. We
have a responsibility to ensure all colleagues work in
a safe environment and have opportunities to learn
and develop in their careers.
We are one of Britain’s largest food
manufacturers and we are proud to work
with many British suppliers. Over the year,
84% of our total third party spend was
with UK based suppliers.
As a responsible food manufacturer,
we consider the impact we have in
the areas we operate, including local
businesses, residents and charities.
We also have an important role to
play in ensuring we reduce our impact
on the environment.
The Board believes in the
importance of acting responsibly
and operating with high standards
of business conduct. The Group
also takes an active role in seeking
to shape and influence debates
around key issues in society
relating to food safety, nutrition
and health & well-being issues.
The Group’s banks, bond holders
and lending group provide essential
financing that supports the long-term
viability of the Group. The Group also
has a large defined benefit pension
scheme, with approximately 43,000
pensioners and deferred pensioners,
who depend on the Group’s long-
term ability to fund the schemes.
An important role of the Board
is to represent and promote the
interests of its shareholders, as well
as being accountable to them for
the performance and activities of
the Group
Issues and factors which are most important to these stakeholders
• Category leadership
• Excellent customer service levels
• Innovative, relevant products which meet
consumers’ needs
• Great tasting products
• Convenient and responsible packaging
formats
• Environmental, nutritional and
sustainability issues
• Understanding our purpose, strategy and values
• Reward and recognition
• Safe and pleasant working conditions
• Learning and development opportunities
• Health and well-being
• Inclusion and Diversity
• Understanding the Group’s strategy
and growth plans
• Forming long-term collaborative
partnerships
• Transparent terms of business
• Fair payment terms
• How our factories impact on local
communities
• Volunteering and supporting
charities
• Reducing carbon emissions
• Environmental commitments
• Plastic packaging
• Food safety
• Nutrition
• Tax
• Conducting business in
a fair way
• Being kept up to date with
Group’s strategy and trading
performance
• Cash flow and Net debt levels
• The strength of our employer
covenant
• Ongoing schedule of
contributions
• Shareholder return over the
medium-term
• Good governance and
stewardship of the Group
and its brands
• Delivery of financial
performance
• Deleveraging the business
• Dividends
Engagement and outcomes
We seek to develop sustainable partnerships
with our customers focused on driving mutual
category growth. Regular meetings take place
at many levels, through the sales team, senior
management and CEO. These cover range
reviews, new products, promotions, displays
and service levels. Feedback from customers is
also provided via an annual customer survey.
Customer insights, from a number of channels,
are shared and discussed at Board meetings,
including details on consumer behaviours,
market trends and competitor activities.
Product tastings and NPD are showcased at
Board meetings. Customer and consumer
feedback is reported to the Board via KPIs.
It is essential that we engage with our
consumers so that we can understand
consumption and lifestyle trends in order to
help us to create products that meet their
needs. We also regularly benchmark our
products with consumers in blind panel tests.
We communicate and engage with colleagues in many
ways to ensure they understand our business priorities
and performance. This ensures that, in turn, we can
listen to their issues and concerns.
We have regular Company briefings led by the CEO and
shared by video feed to all sites across the Group. There
are regular site briefings from management to give
presentations and listen to feedback, supplemented
by ELT and Board visits.
Feedback is received via Group employee surveys, line
management and HR teams, resulting in targeted action
plans to address key areas for improvement. The Board
receives regular updates on key employee issues and
internal communications.
To increase the focus on two-way communication
the Workforce Engagement NED regularly attends
employee forums to discuss key issues directly with
colleagues.
A formal whistleblowing procedure is in place to allow
employees to raise any concerns or issues they have
confidentially and details of all cases raised are fed
back to the Board via the Audit Committee
It is crucial that we develop strong
relationships with our suppliers, based upon
mutual trust and respect, to ensure that we
can source high quality ingredients at the
right price.
We have open, constructive and effective
relationships with suppliers through regular
meetings which provide both parties the
ability to feed back on successes, challenges
and our ongoing strategy.
Regular audits of suppliers are undertaken
to ensure compliance with ethical sourcing
standards. Feedback from suppliers is
also provided via feedback surveys. The
Company’s whistleblowing hotline has been
extended to cover suppliers to allow them to
raise any concerns anonymously.
Key supplier contracts are discussed by the
Board as appropriate.
Payment policies, practice and performance
are reported through the Government’s
Payment Practices Reporting portal
Updates are provided to the Board
on ESG (Environmental Social and
Governance) matters affecting the
business, so that the long-term
sustainability of the Group can be
considered in its decision-making.
The Board receives updates on KPIs
relating to our economic contribution
and environmental impact, as well as
our contributions to the community,
both at a local site level and via the
work we do with our corporate charity
partners.
During the year, the Board reviewed
and approved a new ESG strategy,
the Enriching Live Plan, based around
three pillars: Product, People and
Planet.
The Board receives regular
updates from the Corporate Affairs
& ESG Director on key regulatory
issues affecting the Group and the
food industry, such as nutritional
guidelines, advertising and
promotions.
The General Counsel & Company
Secretary provides updates on
governance, legal, regulatory and
compliance matters.
We seek to take an active role
in responding to the key issues
affecting our industry, through
membership of organisations
such as the Institute for Grocery
Distribution and the Food and
Drink Federation.
Management engages regularly with
the Group’s lenders, bond holders
and banking group via conference
calls, conferences and face-to-face
meetings.
During the first half of the year, the
Group completed the refinancing
of a new Revolving Credit Facility
(‘RCF’) with a refreshed bank Group,
extending the maturity to at least
2024. In addition, we launched a
new £330m Fixed Rate Bond due
October 2026, resulting in significant
interest cost savings. This has helped
to increase cash flow and further
reduce Net debt. Following the year
end, the Group completed the first
extension of the new RCF to 2025.
The CFO maintains a regular dialogue
via attendance at Trustee and
Investment Committee meetings
and regularly reports on the Group’s
trading performance. Periodic
updates are provided to the Board
on funding levels and investment
strategy.
The Board believes it is very
important to engage with its
shareholders and does this in a
number of ways.
This includes the financial results
presentations and conference calls
for shareholders and analysts, face-
to-face meetings, investor road
shows and anonymous shareholder
feedback via brokers. The Chairman
and CEO meet regularly with
shareholders to discuss strategic
and governance matters. The Chair
of the Remuneration Committee
also engages with shareholders
in connection with remuneration
matters.
Board members also have
the opportunity to meet with
private shareholders at the
Company’s AGM.
The Group has been able to
reinstate dividend payments for
the first time since 2008, with the
payment of a final dividend to
shareholders in July 2021.
Further information
→ Read more on Making nutritious and
sustainable food on pages 30 and 31.
→ Read more on Nourishing the lives of our colleagues
and communities on pages 34 and 35.
→ Read more on Contributing to a healthier planet on
pages 32 and 33.
→ Read more on Responsible business’
practices on page 29.
→ Read more on Nourishing the lives
of our colleagues and communities
on pages 34 and 35
→ Read more on Contributing to a
healthier planet on pages 32 and 33
→ Read more on Responsible
business’ practices on page 29
→ Read more on Net debt and free
cash flow KPIs on pages 20 and
21.
→ Further details of the refinancing
on page 45.
→ Read more on Engagement with
shareholders on page 81.
Premier Foods plc
www.premierfoods.co.uk
 71
GOVERNANCE
Nomination committee report
Dear shareholder
On behalf of your Board, I would like to
present the Nomination Committee report
for the period ended 2 April 2022.
The Committee is responsible for:
• Considering the size, structure and
composition of the Board;
• Leading the formal, rigorous
and transparent process for the
appointment of directors;
• Making appointment recommendations
so as to maintain an appropriate
balance of skills, knowledge, experience
and diversity on the Board;
• Ensuring a formal and rigorous
Board and Committee evaluation is
undertaken on an annual basis (an
assessment of which is provided on
page 67); and
• Overseeing the Company’s policy,
objectives and strategy on inclusion
and diversity.
The Committee also reviews the succession
requirements of the Board and senior
management and makes recommendations
to the Board as appropriate. With the
exception of myself, as Chair of the
Board, only independent non-executives
are members of the Committee. I was
appointed Chair of the Board in 2019
and was considered fully independent on
appointment. Details of the Committee’s
membership and meeting attendance are
set out on page 65.
Board membership and
recruitment
The procedures for appointing new
directors are set out in the Committee’s
terms of reference. The process of
appointment is led by the Chair of the
Board except where the appointment is
for their successor, when it is led by the
Senior Independent Director (‘SID’). The
process includes an assessment of the time
commitment expected for the role, other
significant business commitments and any
potential conflicts of interest.
Before an appointment is made, the
Nomination Committee evaluates the
balance of skills, knowledge, experience
and diversity on the Board, as well as the
skills required to help deliver the Group’s
strategy and meet the future challenges
of the business. The Committee prepares
a candidate specification setting out
the role and capabilities required. The
Board promotes an environment which
is supportive of individuals from diverse
backgrounds. In identifying suitable
candidates, the Nomination Committee:
• uses the services of external advisors to
facilitate the search;
• considers candidates of different
genders and from diverse
backgrounds; and
• considers candidates on merit and
against objective criteria taking into
account the benefits of diversity on the
Board.
The Nomination Committee considers the
selection and reappointment of directors
carefully before making a recommendation
to the Board. Non-executive directors
and the Chair of the Board are generally
appointed for an initial period of three
years, which may be renewed for a further
two terms. Reappointment is not automatic
at the end of each three-year term.
Following a review of the Boards composition
by the Committee, it was noted that there
was a need to improve gender diversity and
the Board committed to ensure it was in
compliance with the recommendations of
the Hampton-Alexander Review by the end
of the financial year. A selection process
was undertaken, led by the Chair of the
Nomination Committee with the support of
the Group HR Director.
Following a review of executive search
firms, Russell Reynolds Associates, who
have no other connection with the Group,
was engaged to assist with the NED search.
A specification was prepared and a longlist
of potential candidates was produced.
During the process, the Board was also
made aware of the availability of Lorna
Tilbian and it was agreed to include her
in the selection process. Members of
the Board met with a number of short-
listed candidates over several stages of
interview, following which, three candidates
were identified. Tania Howarth, who has
significant experience in the branded
food industry, with particular expertise in
technology, was appointed in March 2022,
Lorna Tilbian who has extensive experience
in investment banking and financial analysis
was appointed in April 2022, and Roisin
Donnelly, who has expertise in consumer
marketing and brand building, was
appointed in May 2022.
Board tenure
The average length of appointment of
our NEDs was 3 years, as at year end. The
breakdown for the full Board can be seen
in the following chart.
0-1 years: 2
1-3 years: 6
3-6 years: 2
6-9 years: 2
9+ years: 0
(As at 2 April 2022)
Board independence
The Governance Code recommends that
at least half the Board, excluding the
Chairman, should comprise non-executive
directors determined by the Board to be
independent.
Chairman: 1
Independent directors: 7
Non-independent directors: 4
(As at 2 April 2022)
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 72
Only independent NEDs are members of the Company’s Board
committees, with the exception of the Chair of the Nomination
Committee. The Chair of the Board, who was considered
independent on appointment, chairs the Nomination Committee,
but is not a member of the Audit or Remuneration Committees.
Yuichiro Kogo and Daniel Wosner, who represent our two largest
shareholders, are fully independent of management, but are not
considered independent.
Board skills matrix
Set out below is an overview of the relevant skills of the non-
executive directors (as at 2 April 2022).
Experience
No. of
Directors
Senior Leadership 10/10
Operational management 8/10
Commercial/retail 8/10
Consumer/Marketing 8/10
Financial/Investment 7/10
International 7/10
HR/ESG/Governance 5/10
Gender diversity
2022
2022
2022
33%
11%
37%
2022 37%
020406080 100
2021
2021
2021
20%
0%
28%
2021 37%
33%
11%
37%
37%
020406080 100
Board – (4 of 12)
Senior management – (1 of 9)
ELT Direct reports (20 of 54)
All colleagues (1,604 of 4,332)
(Female:male, as at 2 April 2022)
Board – (2 of 10)
Senior management – (0 of 8)
ELT Direct reports (15 of 54)
All colleagues (1,643 of 4,474)
(Female:male, as at 3 April 2021)
Inclusion and diversity
The Board has adopted a Diversity Policy which is available on the
Group’s website and is summarised below.
The Board believes it is important that membership of the Board
includes a broad mixture of skills, professional and industry
backgrounds, geographical experience and expertise, gender,
tenure, ethnicity and diversity of thought. The Board supports
the recommendations set out in the Hampton-Alexander Review
on gender diversity. As at year end, female representation on
the Board amounted to 33% and, with the appointment of
Roisin Donnelly in May 2022, this now stands at 39%. The Board
recognises the new targets announced by the FTSE Women Leaders
Review in February 2022 and will work towards aligning against
those targets. The Board also supports the recommendations of
the Parker Review on ethnic diversity and, as at year end, was
compliant with their recommendation for ethnic diversity on the
Board. Hannah Collyer was appointed to the Executive Leadership
Team (‘ELT’) in May 2021, as Corporate Affairs and ESG Director.
Within the group of ELT direct reports female representation
has improved to 37% over the year, whilst within the wider
management population (circa 550 colleagues), the gender split
was at 47:53 (female to male) as at year-end.
A culture of inclusion and diversity is promoted through a clear
tone from the top, with the Board and ELT championing inclusion
and diversity in support of the Group’s values.
The Board, or where appropriate the Nomination Committee, will:
• Consider all aspects of diversity when reviewing the
composition of the Board and when reviewing the Board’s
effectiveness.
• Only engage executive search firms who have signed up to
the voluntary Code of Conduct on gender diversity and best
practice and request them to identify suitable candidates for
appointment to the Board on merit against objective criteria,
having regard to the benefits of diversity in promoting the
success of the Group.
• Encourage the development of a diverse internal talent pipeline
to meet future succession planning needs of the Group, by
supporting and monitoring the Group’s actions to increase the
proportion of senior leadership roles held by women, people
from ethnic minority backgrounds and other under-represented
groups across the business.
• Assist the development of a diverse pipeline of high-calibre
candidates by encouraging senior individuals within the
business to take on additional roles to gain valuable board
experience.
Premier Foods plc
www.premierfoods.co.uk
 73
GOVERNANCE
Developments over the year
The Board and Nomination Committee have reviewed the Group’s
approach to diversity (including both gender and ethnicity) within
senior management and across the whole business on a number of
occasions, and this remains an area of significant focus. Following
the appointment of a new Director of Talent and Culture and
a Culture and Engagement Business Partner, the rollout of the
Group’s Inclusion and Diversity agenda has made good progress in
the year.
Inclusion and diversity is one of the core principles of Premier
Food’s People strategy which forms part of the Group’s Enriching
Life Plan, which was launched in October 2021. Premier Foods
is committed to creating an inclusive culture across its whole
organisation, where everyone is welcome and able to thrive. The
Company aims to ensure all existing and potential colleagues are
provided with equal opportunity and are respected, valued and
encouraged to bring their true authentic selves to work.
To help drive progress within the People pillar of the Enriching Life
Plan, the Group has made a number of commitments including:
• Achieving gender balance for the senior management
population by 2030; and
• Ensuring diversity KPIs at our sites reflect their regional
demographic by 2030.
The Group has developed and launched a Reverse Mentoring
Programme to help address the gender imbalance within senior
roles across the business. In addition, the HR team have reviewed
colleague recruitment across the business to make sure the Group’s
practices attract as diverse a talent pool as possible. During the
year, the Group has become a member of Stonewall, Trans in
the City and headline sponsors of Diversity in Grocery, to help
raise its external profile. Further training was also provided over
the year, with the implementation of a line manager ‘diversity in
recruitment’ training module.
Work is underway to develop a Sponsorship Programme for
ethnically diverse colleagues across the graded management
population with the assistance of an external partner. Awareness
of Inclusion and Diversity has been provided through an extensive
programme of webinars led by both colleagues and external guests.
The Group will be tracking the progress of its Inclusion and Diversity
programme through the launch of an “Ok to say” colleague survey
which was produced in 6 languages this year, reflecting the diversity
of our workforce.
Further information on our approach to inclusion and diversity
across the business, is set out in the section on our values and
culture, on pages 12 and 13.
Talent and Succession management
The Board reviews the Group’s Talent and Succession process on
an annual basis. This covers all management colleagues to identify,
monitor and develop talent within the Group. Senior leadership
was reviewed in detail, including members of the ELT and their
direct reports. It was noted there is a strong culture of succession
planning and talent management within the organisation. This
has resulted in a significant proportion of senior roles being filled
internally, including the current CEO and CFO, and the majority of
ELT and Factory General Manager positions. Colleagues see this as
positive, helping not only in attracting talent externally, but also
with internal retention. The review also highlighted the key talent
and development plans specifically focused on strengthening
gender and ethnic diversity within management. We have rolled
out a new Leadership Programme in 2021, for our most senior
leaders in the business (circa 80 colleagues), to make sure they
are equipped for the changing future in which leaders will need
to operate, which includes how to lead and manage diverse
teams and how to develop the culture of an organisation. This is
complemented at a more junior level with our graduate recruitment
programme.
Review of non-executive director performance
Over the course of the year, a review of the contribution and
performance of the independent non-executive directors was
undertaken. This included a review of the contribution of each
NED, their other appointments and whether these impacted on
their availability to commit appropriate time to their roles, their
continuing independence and training and development needs.
This was considered by the Nomination Committee as part of its
assessment of the composition of the Board. Following this review,
it was agreed that the Board had an appropriate balance of skills,
experience and knowledge of the Group to enable it to discharge its
duties and responsibilities effectively. In addition, the current Board
was felt to have a broad range of retail, marketing, commercial
and financial experience which is appropriate for the size and
complexity of the Group. Consequently, the Nomination Committee
recommended the re-election (or election) of all directors at the
2022 AGM, with the exception of Pam Powell, who will retire
from the Board following the completion of her third term of
appointment.
Colin Day
Nomination Committee Chair
18 May 2022
Nomination committee report CONTINUED
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 74
Audit committee report
Dear shareholder
On behalf of your Board, I am pleased to present the Audit Committee
report for the period ended 2 April 2022. The Committee has
responsibility, on behalf of the Board, for reviewing the effectiveness of
the Group’s financial reporting systems and the internal control policies
and procedures for the identification, assessment and reporting of risk.
The Committee also keeps under review the relationship with the
external auditor, including the terms of their engagement and fees,
their independence and expertise, resources and qualification, and
the effectiveness of the audit process.
All members of the Committee are independent non-executives,
with a broad range of FMCG, commercial, operational, IT, financial
and marketing experience relevant to the Group’s business. Details of
Committee membership, their qualifications and meeting attendance
are set out on pages 62 to 65. In addition to the Committee members,
the CEO, CFO, Chairman, Director of Financial Control, Head of Internal
Audit & Risk and external audit partner are regularly invited to attend
and present at the Committee’s meetings.
Areas of review
During the financial period, the Committee:
• Monitored financial reporting, including the annual report and
the full-year, half-year and quarterly results announcements;
• Considered the going concern and viability statements for
the Group;
• Reviewed the audit plan with the lead audit partner to assess
the scope, methodology and areas of key risk and materiality;
• Reviewed the ongoing impact of macro economic
developments on the Group’s performance and viability,
including the Covid-19 pandemic and the inflationary pressures
on input costs;
• Received regular reports from the internal audit function,
ensured it was adequately resourced, monitored its activities
and effectiveness, and agreed the annual internal audit plan;
• Reviewed the appropriateness of the Alternative Performance
Measures used by the business and the accounting for
commercial arrangements;
• Reviewed the key findings of the Financial Reporting Council’s
Audit Quality Review team, which published a report on the
overall quality of the audit work performed by KPMG and other
large audit firms, noting the recommendations and KPMG’s
response.
• Reviewed the outcome of the FRC’s review of the Company’s
FY20/21 annual report;
• Received updates on the progress of a project to simplify the
Group’s corporate structure;
• Received updates on changes to governance and financial
reporting, including TCFD;
• Conducted a bi-annual review of key risks facing the business
and assessed the Group’s mitigation plans;
• Undertook a review of the Group’s Finance Team, reviewing
structure, resource levels, key senior appointments and talent
management, to ensure it remained adequately resourced and
effective;
• Reviewed and the Group’s policy on Auditor Independence and
Non-Audit Services;
• Reviewed the Group’s cyber security and business continuity
management plans; and
• Reviewed calls received from the whistleblowing helpline and
management’s response to them.
External auditor appointment, independence and non-
audit services
KPMG were appointed as external auditor in September 2015,
following a comprehensive tender process. Over the course of the
year, the Committee has continued to review the effectiveness
and independence of the auditor and assessed the effectiveness of
the external audit process by reference to the scope of the audit
work undertaken, presentations to the Committee, feedback from
management involved in the audit process and separate review
meetings held without management.
In accordance with our Auditor Independence Policy, the
Committee has continued to review the level of non-audit fees
with management during the year. The Committee also received an
update from KPMG’s lead partner on the internal controls that they
employ to safeguard their independence, integrity and objectivity.
The Group’s policy on Auditor Independence and Non-Audit
Services is available on the Group’s website.
Non-audit fees for the period amounted to £199,500 (FY20/21:
£64,500) representing 16.1% of the audit fee. As highlighted in
last year’s Audit Committee report, the increase in non-audit fees
reflected the assurance work KPMG were engaged to perform in
relation to the issue of new 5 year Senior Secured Fixed Rate Notes
in May 2021, which amounted to £130,000. KPMG also provided
audit related assurance services in respect of the Half Year results
(£60,000) and the provision of royalty statements required under
our Cadbury licence with Mondelēz International. The Committee
remains mindful of guidelines in respect of non-audit services and
the potential threat to auditor independence. The Committee
assessed that, in each case, the nature of the work would be best
performed by KPMG due to their knowledge of the business, the
timescale required for completing the assignments and the overall
cost in undertaking the work. In addition, KPMG consulted their own
internal Audit Quality and Risk Management team prior to agreeing
the engagements. KPMG’s procedures for ensuring compliance with
quality control standards, maintaining independence, integrity and
objectivity were also reviewed and no matters were identified which
might impair the auditor’s independence and objectivity.
Following these reviews, the Committee is satisfied that KPMG
remains independent and effective. The Company is proposing to
undertake an audit tender exercise, the result of which will not
be known until after the 2022 AGM has been held. In the interim
period, KPMG have indicated their willingness to continue to act
as the Company’s auditor until the outcome of the tender has
been concluded, and the Committee has recommended to the
Board that KPMG be reappointed at the AGM in 2022 (the Board’s
recommendation is set out on page 99). An update on the outcome
of the tender exercise will be communicated once it has been
completed.
Premier Foods plc
www.premierfoods.co.uk
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Audit committee report CONTINUED
Alternative Performance Measures (‘APMs’)
The Group’s performance measures continue to include a number of
measures which are not defined or specified under IFRS. The Audit
Committee has considered presentation of these additional measures
in the context of the guidance issued by the European Securities
and Markets Authority (‘ESMA’) and the FRC in relation to the use of
APMs, challenge from the external auditor, and the requirement that
such measures provide meaningful insight for shareholders into the
results and financial position of the Group. The Committee reviewed
the APMs used within the Group’s financial statements, how the
APMs were defined and the rationale for their use.
APMs are defined relative to the equivalent IFRS measures, on
pages 49 and 50.
Financial Reporting Council (‘FRC’) review of FY20/21
annual report
The FRC performed a review of the Group’s FY20/21 annual report
in accordance with Part 2 of the FRC Corporate Reporting Review
Operating Procedures. The Committee was pleased to note that
the review raised no questions or queries. The FRC made some
recommendations for enhancing existing disclosures and the
Committee reviewed the recommendations and management’s
response to them.
The FRC’s review is based on our published annual report and does not
benefit from detailed knowledge of our business or an understanding
of the underlying transactions. It provides no assurance that our
Annual Report and Accounts is correct in all material respects. The
FRC’s role is not to verify the information provided, but to consider
compliance with reporting requirements. The FRC accepts no liability
for reliance on the FRC’s review by the Company or any third party,
including but not limited to investors and shareholders.
Committee evaluation
As part of the internal Board evaluation exercise conducted
during the year (see page 67 for more information), a review of
the Committee’s effectiveness was also undertaken. The review
included the management of meetings, quality of papers and
presentations, and the Committees effectiveness in assessing the
work of the internal and external auditors, the financial statements,
risk management and internal controls. It was confirmed that the
Committee remained effective and an action plan for the coming
year was agreed.
The Committee met with the internal and external auditor on four
occasions in the year without the presence of management. This
provides an opportunity for the Committee to discuss matters
independently of management, assess the relationship between
management and the external auditor and to discuss any potential
areas of concern. In addition, the Committee Chair also met
independently with the CFO, lead audit partner and Head of Internal
Audit & Risk on a number of occasions to discuss key audit matters.
Training
During the year training was provided on commercial arrangements
and the accounting for these within the financial statements, the use
of Alternative Performance Measures and the consultation from the
Department for Business, Energy and Industrial Strategy (BEIS) on the
potential introduction of a new regulatory regime on similar basis to
the US Sarbanes-Oxley regime.
Task Force on Climate-related Financial Disclosures
(‘TCFD’)
The Committee provides oversight of the Group’s compliance
with the recommendations of TCFD. A TCFD steering group has
been established to develop the Group’s approach to TCFD, raise
awareness of climate-related risks around the business and to
report on progress to the Committee. The TCFD steering group also
co-ordinates the adoption of TCFD best practices into the Group’s
Enterprise Risk Management processes and ensures visibility and
oversight of the programme by the ESG Governance Committee.
Over the year the Committee reviewed progress against the various
workstreams, the Group’s TCFD roadmap and the four disclosure
pillars (Governance, Strategy, Risk Management, and Metrics and
Targets). The Group’s TCFD disclosure is set out on pages 36 to 40.
Risk management
The Group has an established risk management framework to
identify, evaluate, mitigate and monitor the risks the business faces.
The risk management framework incorporates both a top-down
approach to identify the Group’s principal risks and a bottom-up
approach to identify the Group’s operational risks. The principles
of risk management have also been embedded into the day-to-day
operations of the business units and corporate functions.
The Committee has carried out an assessment of the principal
risks facing the business, including climate-related risk, on two
occasions over the year. The reviews include an assessment of new
and emerging risks, the movement in the risks, the strength of the
controls relied on and the status of mitigating actions. The output
from these assessments have subsequently been presented to
the Board.
Details of our risk management process are set out in the risk
management section, on pages 51 to 57.
Internal controls
In accordance with the FRC guidance on audit committees and the
Governance Code, an annual review of internal controls is conducted.
The Board has delegated authority to the Audit Committee to
monitor internal controls and conduct the annual review. This
review covers all material controls, such as financial, operational and
compliance, the preparation of the Group’s consolidated financial
statements, and also the overall risk management system in place
throughout the year under review, up to the date of this annual
report. The Committee reports the results of this review to the
Board for discussion and, when necessary, agreement on the actions
required to address any material control weaknesses. The Committee
confirms that it has not been advised of any failings or breaches
which it considers to be significant during the financial period and
found the internal controls to be effective.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 76
Internal audit
The internal audit function carries out work across the Group,
providing independent assurance and advice to help the Group
identify and mitigate any potential control weaknesses. Both
the internal audit and risk management functions have a role in
identifying emerging risks that may threaten the achievement of
the Group’s strategic priorities.
The internal audit function provides internal audit reports detailing
significant audit findings, progress of, and any changes to, the
internal audit plan and updates on agreed management actions
to rectify control weaknesses. Where appropriate, additional
information is provided where either the Committee has requested
it, or the Head of Internal Audit & Risk feels it pertinent. Annually,
the Head of Internal Audit & Risk will give an assessment of the
overall control environment.
Prior to the start of the new financial year, the Committee reviewed
and agreed the internal audit plan for the upcoming year. The
Committee also reviewed those plans again during the year in
light of Covid-19. The internal audit plan is risk based and takes
an independent view of what internal audit considers to be the
highest known and emerging risks and strategic priorities facing
the business. The planned audits will assess the adequacy and
effectiveness of the internal control environment, identifying
weaknesses and ensuring these are addressed within agreed
timelines.
Audit work over the year focused on the following four core areas:
Business and operational audits – Trade promotion management,
impact of the changes to working practices at sites and offices
as a result of the Covid-19 pandemic, fixed assets and capex
management, operational HR management, controls on marketing
spend, customer complaint management and social media
management.
Factory and subsidiary audits – Product pricing and standard
costing.
Finance and other audits – Payroll compliance with national
minimum wage legislation.
Technology audits – IT asset management.
In addition, the Chair of the Audit Committee held a number of
meetings with the Head of Internal Audit & Risk. The Committee has
also considered the effectiveness of the function as part of its review
and approval of the three-year audit plan and its interaction with
the external auditor. The Committee has concluded that the internal
audit function remains effective.
During the coming financial year, FY22/23, the Internal Audit will
continue to build and develop its data analytics capability as part of
its three year strategy to deliver better insights to management.
Fair, balanced and understandable
The Board requested that the Audit Committee confirm whether
the annual report and accounts taken as a whole were fair,
balanced and understandable and whether it provided the
necessary information for shareholders to assess the Group’s
position and performance, business model and strategy. The Audit
Committee recommended that the Board make this statement,
which is set out on page 99.
In making this recommendation the Committee considered the
process for preparing the annual report, which included regular
cross functional reviews from the teams responsible for preparing
the different sections of the report, senior management review and
verification of the factual contents. It also considered the balance
and consistency of information, the disclosure of risk and the key
messages presented in the report.
Significant issues in relation to the financial
statements
The Committee considered the following significant issues in
relation to the financial statements with management and the
internal and external auditor during the year:
Commercial arrangements
Commercial payments to customers in the form of rebates and
discounts represent significant balances in the income statement and
balance sheet. Calculations of these balances require management
assumptions and estimates, including volumes sold and the period
of the arrangements. The Committee reviewed the assumptions and
estimates and the level of accruals and provisions in detail. Further
information is set out in note 3.4 on page 123.
Carrying value of goodwill and brands
Goodwill and brands represent a significant item on the balance
sheet and their valuation is based on future business plans whose
outcome is uncertain. The value of goodwill is reviewed annually
by management and the Committee and brands are reviewed
where there is an indicator of impairment. The impairment testing
for goodwill and brands is based on a number of key assumptions
which rely on management judgement.
For the purpose of goodwill, the Group has four CGUs – Grocery,
Sweet Treats, International and Knighton. The Committee reviewed
the results of goodwill impairment testing of the CGUs and the review
of the carrying value of certain of the Group’s brands. There is no
goodwill attributable to the Sweet Treats or Knighton CGUs and the
International CGU has no goodwill or intangible assets. The results
of the impairment testing included management’s assumptions in
respect of cash flows, long-term growth rates and discount rates. The
Committee also considered sensitivities to changes in assumptions and
related disclosure as required by IAS 36. This year’s review concluded
that no impairment of Goodwill or brands was required. Further
information is set out in notes 11 and 12 on pages 132 to 134.
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GOVERNANCE
Audit committee report CONTINUED
Carrying value of parent company’s investments in
subsidiaries
The carrying value of the parent company’s investments in its
subsidiaries is a significant item on the parent company’s balance
sheet. The investment is reviewed annually for impairment by
management and the Committee. The cash flow forecasts used
in the impairment model are based on the latest Board approved
budget for year 1 and strategic plan for years 2 and 3, sensitivities
then being applied to reflect the potential impact of the current
Covid-19 pandemic, the upcoming UK regulations impacting the
food industry, and the current global political uncertainty driven
by the conflict in Ukraine. This year’s review concluded that no
impairment of the parent company’s investment in its subsidiaries
was required. Further information is set out in note 11 to the group
financial statements on pages 132 - 133 and note 4 to the parent
company’s financial statements on pages 160 - 161.
Defined benefit pension plans
The Group operates a number of defined benefit schemes. The
schemes are closed to future accrual but hold substantial assets
and liabilities. With effect from 30 June 2020, the Premier Foods
Pension Scheme (PFPS) and Premier Grocery Products Pension
Scheme (PGPPS) were merged on a segregated basis with the
RHM Pension Scheme. The transfer of assets and liabilities to new
sections of the RHM Pension Scheme for both the PFPS and PGPPS
has been completed. Valuation of the scheme liabilities is based
on a number of assumptions, such as inflation, discount rates and
mortality rates, each of which could have a material impact on the
valuation under IAS 19 included in the balance sheet. The Group’s
RHM Pension Scheme also holds assets for which quoted prices
are not available. As at 2 April 2022 the RHM Pension Scheme
reported a surplus of £1,138.8m and the Premier Schemes reported
a deficit of £193.9m (FY20/21: RHM Pension Scheme surplus of
£922.5m; Premier Schemes deficit of £382.6m), the year-on-year
reduction largely driven by the return on scheme assets and change
in financial assumptions. The Committee reviewed the basis for
management’s assumptions and the movements in the IAS 19
valuation in detail over the year. The financial assumptions were
based on the same methodology as last year. Further information is
set out in note 13 on pages 135 to 141.
Viability and going concern
The Audit Committee conducted a number of detailed reviews of
the Group’s viability and going concern, taking into account severe
but plausible business downsides, including the potential impact
of the current Covid-19 pandemic and current global political
uncertainty driven by the conflict in Ukraine. The Committee
concluded that it was reasonable for the Board to expect that
the Group would have adequate resources to operate for the
foreseeable future and therefore recommended that the viability
statement (set out on page 58) and the going concern statement
(set out in note 1 on pages 115 and 116) could be supported.
Simon Bentley
Audit Committee Chair
18 May 2022
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 78
Directors’ remuneration report
Annual Statement
Dear shareholder
On behalf of the Board, I am pleased to present the Directors’
Remuneration report for the 52 week period ended 2 April 2022.
Overview of performance
The business has continued to perform strongly during the year,
despite facing a number of challenges, balancing the continued
need to ensure the health and safety of colleagues, whilst
navigating changing Government guidelines and maintaining
excellent service levels to our customers. With the reduction of
restrictions on out-of-home consumption and social distancing
over the course of FY21/22, as anticipated, we have seen demand
return to more normal levels. Measuring direct performance versus
last year is therefore challenging, given the exceptional demand
for our products that was experienced at the peak of the Covid
pandemic, particularly in Q1. As a result, business performance for
this year is being reported by reference to both two years ago and
the prior year.
Revenue of £900.5m was +6.3% versus 2 years ago and -3.6%
below last year (on a 52 week basis), Trading profit of £148.3m was
equal to last year (on a 52 week basis) and +11.9% versus two years
ago, and Net debt reduced to £268.9m (on a pre-IFRS 16 basis).
Taking into consideration the unprecedented nature of demand in
the prior year, the Board believes that these represent a very strong
set of results, and demonstrate both the strength of the Group’s
brands and its growth strategy.
The management team continued to focus on keeping the business
fully operational while maintaining measures, including social
distancing, enhanced PPE, changes to working practices, and
remote working where practical, across our sites, to ensure the
safety and well-being of our colleagues was given the highest
priority.
The business has also been impacted by a number of other
headwinds facing global supply chains across a number of
industries, including a shortage of heavy goods vehicle (HGV)
drivers, general labour shortages and the impact of significant
inflationary pressure on both ingredients and other input costs.
Over the year, management has been successful in putting in place
a series of robust plans to mitigate this and maintain excellent
customer service levels.
The Group has seen further strong performance in the share price,
which has increased from 94.6p to 115.6p in the period (+22%).
With the Group’s debt levels now normalised, it was able to pay
a final dividend of 1.0p per share in July 2021, representing the
first dividend paid by the Company since 2008. The Board has
recommended a final dividend for FY21/22 of 1.20p per share,
representing an increase of 20% versus prior year.
Annual Bonus performance outcome for FY21/22
As highlighted in the CEO review, the Group has made good
progress in the delivery of the Group’s growth strategy, with a
strong trading performance and continued reduction in Net debt,
resulting in both of the stretching financial targets being exceeded.
The Committee also assessed the non-financial targets set for the
CEO and CFO, which were based on strategic, operational and ESG
objectives, and following strong performance against the stretching
objectives set, it was determined that both the CEO and CFO had
fully achieved these objectives.
In assessing the annual bonus outcome, the Committee undertook
a review of each director’s individual performance, the overall
performance of the business and also the experiences of key
stakeholders including shareholders, employees, suppliers and
customers. This resulted in the Committee awarding a bonus of
100% of maximum to Alex Whitehouse (£634,375, representing
125% of salary) and a bonus of 100% of maximum to Duncan
Leggett (£325,059, representing 100% of salary). Full details of the
targets and performance over the period are provided on pages 84
and 85.
One-third of the annual bonus payment will be made in the form of
shares deferred for a three-year period under the Deferred Bonus
Plan (DBP). Details of the DBP are set out on page 86.
LTIP
The Committee assessed the performance conditions for the 2019
LTIP award. TSR performance was above upper quartile compared
to the FTSE All-Share comparator group (positioned between 3rd
and 4th out of 386 companies) and adjusted EPS of 12.1p exceeded
the maximum target set, meaning that both elements of the
award will vest in full in June 2022. Full details of the targets and
performance over the period are provided on page 94.
In assessing the annual bonus and LTIP outcomes, the Committee
undertook an assessment ‘in the round’, to ensure that the
outcomes are a fair reflection of overall Company performance
and aligned with the experience of other stakeholders. As part of
this, the Committee was pleased to note that since the start of the
Covid-19 pandemic, the Group chose not to furlough any colleagues
or make any redundancies and did not take financial support from
the Government in respect of the pandemic. The success of the
business over the last two years has been shared with colleagues
and has resulted in a significant increase in the share price and
creation of shareholder value. The increased financial strength
of the business has also enabled the reintroduction of dividend
payments in 2021.
Taking all of the above into account, alongside the wider
performance context detailed elsewhere in the annual report, the
Committee considered that the annual bonus and LTIP outcomes
are a fair reflection of Company and individual performance in the
year. As such, the Committee has not exercised its discretion to
adjust awards.
Executive Directors’ Salary
Both Alex Whitehouse (CEO) and Duncan Leggett (CFO)
were appointed in 2019 on salaries significantly below their
predecessors. At that time, the Committee set out its aim to
increase their salaries over the two years from their appointment
to a level at, or near, the FTSE 250 lower quartile, which the
Committee feels is currently appropriate given the Company’s
market capitalisation and also its level of turnover, enterprise value
and complexity.
Alex Whitehouse’s salary was increased to a level around the FTSE
250 lower quartile in FY20/21 and therefore his salary increase
of 2% in FY21/22 was in line with all colleagues not involved in
collective bargaining. As advised in last year’s Remuneration Report,
a further above average increase to Duncan Leggett’s salary was
anticipated, to bring it in line with the FTSE 250 lower quartile.
Duncan Leggett’s salary was increased by 2% in line with the wider
workforce from 1 July 2021, and then was further increased to
£350,000 (+10.8%) with effect from 10 December 2021 (reflecting
the second anniversary of his appointment). When considering
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GOVERNANCE
Directors’ remuneration report CONTINUED
the salary increase the Committee assessed his performance
since appointment and agreed that he continued to perform
strongly in his role as CFO and that the increase was therefore
appropriate. The Committee also took into consideration the overall
performance of the business during the year and the experiences
of other stakeholders. It should also be noted that both salaries are
currently at levels well below those of their predecessors (CEO: c.
-27% and CFO: c. - 18%).
Executive director
Salary as at
2 April 2022 Change
Salary as at
3 April 2021
Alex Whitehouse £510,000 +2.0% £500,000
Duncan Leggett £350,000 +12.9% £310,000
The Committee will continue to keep the executive directors’
salaries under review as the Company’s size and complexity
continues to increase.
Arrangements for FY22/23
A new Remuneration Policy was approved by shareholders in
August 2020, with over 96% of votes received in favour. The
Committee considers that the Remuneration Policy operated as
anticipated over the financial period and no changes are proposed
to the Policy for FY22/23.
During the year, the Committee carried out a review of
arrangements with a particular focus on performance measures,
to ensure the overall remuneration strategy for executive directors
and senior management remained competitive and continued to
drive the right behaviours and support the implementation of the
Group’s strategy. As a result, changes are proposed to performance
measures as outlined below:
Annual Bonus measures
For FY22/23, the annual bonus will be based 50% on Trading
Profit, 20% on operating cash flow and 30% on strategic and ESG
measures.
The Committee considered the use of Net debt as a financial
measure, and agreed that, given that the Company’s debt levels
have now normalised, this should be replaced with operating cash
flow going forward. It was noted that, in recent years, the Group
had made significant progress in deleveraging the business. In
addition, it was felt that the continued focus on Net debt could
conflict with the need to invest in the business, which is required
to deliver the Group’s growth strategy. It was agreed that a strong
focus on cash flow management (including working capital and
efficient capital spend) remained important.
Within non-financial measures, it was agreed that for both
executives 20% would relate to strategic measures and 10% to ESG
measures. This reflects the growing focus on ESG within the Group
and will support the recently launched ESG strategy.
LTIP measures
Following a review of the performance measures for the LTIP, it
was agreed that the current measures of TSR and EPS remained
the most appropriate for the Group and remained aligned with the
delivery of the Group’s strategy.
The weighting of two-thirds TSR and one-third EPS was reviewed,
and it was considered that moving to an even split between the
two measures would be appropriate, as this gives greater focus to
financial performance which is aligned with the Group’s growth
strategy. It was felt that this would also encourage investment in
the business and ultimately drive profitable growth.
In addition, it was also agreed to move the comparator group for
TSR from the FTSE All Share to the FTSE 250, recognising that the
Company is now an established member of the FTSE 250.
The Committee reviewed the targets for the annual bonus and LTIP
in FY22/23 and agreed that they are challenging and set at levels
that will reward very good performance. They are also considered
to be aligned with the Group’s strategic priorities and further details
of the measures for FY22/23 are provided on page 94.
During FY22/23, the Committee will be undertaking a further
comprehensive review of the Directors’ Remuneration Policy in
advance of submitting a revised Policy to shareholders at the 2023
AGM as required by the regulations.
Chair’s fees
The Committee considered the Chair’s fee, noting the significant
contribution the Chair had made to the Group since appointment,
the successful turnaround in the Group’s performance and also the
significant time commitment for the role, and it was agreed that it
would be appropriate to increase the Chair’s fee to £235,000 with
effect from 1 March 2022.
Relationship between ESG matters and
remuneration arrangements
The Committee is aware of the increasing importance of ESG
matters for both the Group and its stakeholders. An element of
ESG was included in the executive directors’ annual bonus goals for
FY20/21, and the weighting of this element has now been aligned
for both executive’s annual bonus goals for FY22/23. These goals
are directly linked to the delivery of the Group’s ESG strategy, the
Enriching Life Plan. In addition, as part of the Committee’s overall
review of the Group’s remuneration strategy, it ensures that
arrangements do not encourage behaviour which is not aligned
with the Group’s ESG strategy. Further information regarding the
Group’s Enriching Life Plan are set out on pages 24 to 35.
Wider workforce
During the year, the Workforce Engagement NED has provided
updates on meetings held with colleagues across the business,
and details of any issues or concerns raised. The Committee also
reviewed information on broader workforce pay policies and
practices, which provided important context for the decisions on
executive pay taken during the year. The pension levels for the
executive directors are aligned with that available to the majority
of the workforce. The operation of the annual bonus scheme is
consistent for all participants, and any financial measures are
aligned with the overall Group targets. The executive directors have
other additional constraints on their remuneration package which
are not applicable to the wider management population, such as
bonus deferral and the LTIP holding period.
The Group also operates an all-employee Sharesave Plan which
allows all colleagues to share in the success of the Group. The
colleague participation rate in this scheme is currently 31%.
I look forward to receiving your support for the Annual Report on
Remuneration at the 2022 AGM.
On behalf of the Board
Pam Powell
Remuneration Committee Chair
18 May 2022
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 80
Overall approach to remuneration
At Premier Foods, the Remuneration Policy is designed to attract,
retain and motivate a high calibre management team. Focus is placed
on driving exceptional performance and creating shareholder value
in a sustainable way, as well as aligning the interests of the executive
directors with key stakeholders.
The Committee follows the following broad principles when
considering the design, implementation and assessment of
remuneration, in line with the recommendations set out in
Provision 40 of the 2018 UK Corporate Governance Code:
Clarity – remuneration arrangements should be transparent
and promote effective engagement with shareholders and
the workforce
The Company’s Remuneration Policy is designed to support the
delivery of the Group’s strategic objectives which are aligned with
the long-term interests of both shareholders and key stakeholders,
including employees. The Committee is committed to being
transparent in respect of the elements of remuneration, quantum, the
rationale for targets set and performance outcomes. The work of the
Workforce engagement NED provides an opportunity for engagement
with colleagues on executive remuneration. The Committee engages
with shareholders and is keen to understand their views and priorities.
Recent engagement has included discussion to understand shareholder
views on the continued strategic focus on Net debt and whether
it remained an appropriate bonus goal following the continued
deleveraging of the business. Following review, the Committee agreed
that it would be appropriate to replace Net debt with operating cash
flow as a financial measure for FY22/23. The Committee also reviewed
the performance measures for the LTIP and agreed to balance the
weighting between TSR and EPS (further details are set out on
page 80).
Simplicity – remuneration structures should avoid
complexity and their rationale and operation should be
easy to understand
The Committee believes the current arrangements for executive
directors to be simple. These consist of the following elements:
• A fixed element that comprises salary, pension and taxable
benefits.
• A variable element that is subject to performance conditions
and comprises:
− short-term goals via the annual bonus plan; and
− long-term goals via the Long-Term Incentive Plan.
The Committee has made a number of changes to the
Remuneration Policy over the last few years to remove complexity
and reflect market practice and considers that the current
arrangements are clear, easy to understand and provide an
appropriate balance between fixed and variable remuneration.
During the year, the Committee reviewed the annual bonus
measures for the executive directors and made changes to these to
enhance alignment between the CEO and CFO (further details are
set out on page 80).
Risk – remuneration arrangements should ensure
reputational and other risks from excessive rewards, and
behavioural risks that can arise from target-based incentive
plans, are identified and mitigated
Targets are reviewed to ensure they reflect the overall risk appetite
set by the Board and do not encourage inappropriate behaviours or
excessive risk taking.
Mitigation is provided through the recovery provisions that apply
to both the annual bonus and LTIP. The Committee updated the
malus and clawback provisions in line with current best practice
expectations in FY19/20. This included introducing additional
trigger events in the event of corporate failure and/or material
damage to the Company’s business or reputation. The LTIP rules
have also been updated to include a discretion to override the
vesting result in exceptional circumstances.
In addition, holding periods are in place for awards under the
Deferred Bonus Plan and LTIP.
Predictability – the range of possible values of rewards to
individual directors and any other limits or discretions should
be identified and explained at the time of approving the Policy
The Committee assesses the potential outcome of future reward
by reference to potential pay-outs that can be received at a range
of outcomes (minimum, mid-point and maximum), as set out in the
Remuneration Policy approved by shareholders at the 2020 AGM.
In addition, the effect of future share price growth under the LTIP
is also considered based on a 50% increase in share price over the
period.
Proportionality – the link between individual awards, the
delivery of strategy and the long-term performance of the
company should be clear. Outcomes should not reward poor
performance
The Committee seeks to ensure that targets for the annual bonus
and long-term incentives are aligned with the Group’s strategy and
the long-term sustainable development of the business.
The focus of our remuneration strategy is on rewarding
performance – the majority of executive remuneration
(approximately 70% at maximum) is variable and only payable if
demanding performance targets are met. The majority of variable
pay is payable in the form of shares.
When setting targets for variable elements of pay, the Committee
carefully considers the targets to minimise the risk of excessive
reward.
When assessing performance against the annual bonus and LTIP,
the Committee also considers:
• the overall performance of the business;
• the experience of key stakeholders including shareholders,
employees, suppliers and customers;
• the quality of earnings when assessing the achievement of
financial targets; and
• the market in which the Company operates.
The Committee retains discretion to override formulaic outcomes
produced by the performance conditions where, in the Committee’s
view, they do not reflect the performance of the business over the
period, individual performance or where events happen that cause
the Committee to determine that the conditions are unable
to fulfil their original intended role.
Alignment to culture – incentive schemes should drive
behaviours consistent with company purpose, values and
strategy
As part of the preparation of the 2020 Remuneration Policy, the
Committee reviewed the overall design of the Group remuneration
strategy and believes that it is consistent with the Company’s
purpose, values and strategy and is aligned with the Group’s
culture. When setting the annual goals for the annual bonus and
LTIP award, the Committee considers a range of different potential
measures in order to select those that it believes are most likely
to drive the successful delivery of the Group strategy and are
aligned with shareholders’ interests to deliver earnings growth and
improved shareholder value in the medium-term (further details
are set out on page 80).
Premier Foods plc
www.premierfoods.co.uk
 81
GOVERNANCE
Directors’ remuneration report CONTINUED
Summary of the Directors’ Remuneration Policy
The current Directors’ Remuneration Policy was approved by shareholders at the AGM on 12 August 2020 (with 96.65% of shares voted
being in favour). The following table presents a summary of the key elements of the current Directors’ Remuneration Policy and how it will
be implemented in FY22/23. The full policy is available in the FY19/20 annual report which can be found on the Group’s website at
www.premierfoods.co.uk
Current elements of remuneration and Operation How we plan to implement the Policy in FY22/23
Base salary
Set at levels to attract and retain talented individuals with reference
to the size and complexity of the business, the specific experience,
skills and responsibilities of the individual, and the market rates
for companies of comparable size and complexity and internal
Company relativities.
Normally reviewed annually (currently with effect from 1 July)
in conjunction with those of the wider workforce.
As of 2 April 2022, salaries are as follows:
• CEO – £510,000
• CFO – £350,000
As set out in the FY19/20 Remuneration Report, both CEO and CFO
were appointed on salaries significantly below their predecessors
and, as stated at the time, the Committee has approved increases
to their salaries over the two years from their appointment to bring
them both to a level at, or near, the FTSE 250 lower quartile.
Benefits
Benefits include: cash allowance in lieu of company car; fully
expensed fuel; private health insurance; life insurance; permanent
incapacity benefit; professional memberships; and other ancillary
benefits, including relocation expenses (as required).
No change.
Pension
Pension contributions or a salary supplement of 7.5% of base pay
up to an earnings cap, in line with that offered to the majority of
the workforce.
No change.
Annual bonus
Designed to incentivise delivery of annual financial and operational
goals and directly linked to delivery of the Group’s strategy.
Maximum opportunity:
• CEO – 125% of salary
• CFO – 100% of salary
One-third of earned bonus is deferred into shares for three years.
Awards are subject to malus and clawback provisions.
Maximum opportunity (no change):
• CEO – 125% of salary
• CFO – 100% of salary
Awards will be subject to the following performance measures:
• Trading profit (50% weighting);
• Operating cash flow (20% weighting);
• Strategic objectives (20% weighting); and
• ESG objectives (10% weighting).
Awards will also be subject to a Trading profit underpin.
For FY22/23, the Committee agreed to replace Net debt with
operating cash flow as a financial measure.
Long-Term Incentive Plan
The Premier Foods Long-Term Incentive Plan (‘LTIP’) provides a
clear link to our strategic goal of delivering profitable growth with
sustainable share price growth over the medium to long-term.
Maximum opportunity of 150% of salary.
Awards are subject to a three-year performance period, followed
by a two-year holding period.
The proportion of awards which will vest for threshold performance
is 20%.
Awards are subject to malus and clawback provisions.
FY22/23 LTIP award levels (no change):
• CEO – 150% of salary
• CFO – 100% of salary
Awards are subject to the following performance measures:
• Relative TSR (50% weighting); and
• Adjusted EPS (50% weighting).
For FY22/23, the Committee agreed to balance the weightings of
TSR and EPS (previously two-thirds TSR and one-third EPS). The TSR
comparator group has also been changed to the FTSE 250 Index
(previously FTSE All Share Index).
Shareholding guidelines
Shareholding guideline of 200% of salary.
Executive directors are expected to retain 50% of shares from
vested awards under the DBP and LTIP until they reach the
guideline.
The current shareholdings reflect the fact that both the CEO and
CFO are relatively new to their roles:
• CEO – 135% of salary
• CFO – 37% of salary
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 82
Annual Report on Remuneration
An advisory vote on this Annual Report on Remuneration will be put to shareholders at the 2022 AGM. The Committee believes that
the Remuneration Policy operated as intended in the year.
Single figure table for total remuneration (audited)
Single figure for the total remuneration received by each executive director for the 52 weeks ended 2 April 2022 (FY21/22) and the
53 weeks ended 3 April 2021 (FY20/21).
Alex Whitehouse Duncan Leggett
FY21/22
£’000
FY20/21
£’000
FY21/22
£’000
FY20/21
£’000
Salary 508 492 325 289
Taxable benefits
1
31 31 21 21
Pension 13 13 13 13
Total fixed remuneration 552 536 359 323
Annual Bonus
2
634 625 325 298
Share based awards
3
1,014 865 – –
Total variable remuneration 1,648 1,490 325 298
Single figure for total remuneration 2,200 2,026 684 621
1
Both directors were granted an award over 4,067 shares under the all employee Sharesave plan on 16 December 2021. An amount of £846 has been included within benefits,
which represents the 20% discount to the share price immediately prior to the offer (see the executive share awards table on page 88 for more information).
2
One-third of the Annual Bonus will be deferred into shares for three years, which are awarded under the terms of the DBP.
3
The figures for share based payments for FY21/22 represent an estimate of the value of the 2019 LTIP award, which will vest in full in June 2022, based on the three-month
average price to 2 April 2022 of 112.6p. The share price at the date of grant was 34.0p. 70% of the value reported in the single figure is attributable to share price appreciation in
the period and no discretion has been exercised in relation to this. The figures for FY20/21 have been adjusted, in line with statutory reporting requirements, from those in last
year’s report to show the actual value upon vesting of the award on 8 August 2021, based on a share price of 112p.
Base salary and fees (audited)
The Committee sets base salary by reference to the size and complexity of the business, based on factors such as market capitalisation,
revenue, market share, and total enterprise value.
Alex Whitehouse was appointed CEO on 30 August 2019 and Duncan Leggett was appointed CFO on 10 December 2019. As advised at the
time of their appointments, the Committee aims to increase their salaries over the next two years to a level at, or near, the FTSE 250 lower
quartile, which the Committee feels is appropriate given the Company’s market capitalisation and also its level of turnover, market value
and complexity.
Alex Whitehouse’s salary was brought into line with the FTSE 250 lower quartile during FY20/21 and on 1 July 2021, he received a salary
increase of 2% in line with all colleagues not involved in collective bargaining. Duncan Leggett also received a salary increase of 2% on 1 July
2021. In line with our stated approach on his appointment of alignment with the lower quartile of the FTSE 250 and following a review of
performance for the CFO since taking on his role (see the Committee Chair’s Annual Statement), the Committee agreed to increase Duncan
Leggett’s salary to £350,000 with effect from 10 December 2021. The CFO’s salary is now positioned around the FTSE 250 lower quartile. It
should also be noted that both salaries are currently at levels well below those of their predecessors (CEO: circa -27% and CFO: circa -18%).
Executive director
Salary as at
2 April
2022 Change
Salary as at
3 April
2021
Alex Whitehouse £510,000 +2.0% £500,000
Duncan Leggett £350,000 +12.9% £310,000
Benefits
Benefits provided for the period related to the provision of car allowance, private fuel, private medical insurance and professional membership.
Pension
Under the Company’s Remuneration Policy, pension entitlements for executive directors are aligned with those available to the majority of
the workforce, which currently equates to a contribution of 7.5% of basic pay up to an earnings cap (£172,800 for the 2021/22 tax year).
Executive directors have the right to participate in the Group’s defined contribution (‘DC’) pension plan, with any contribution above their
annual allowance paid as cash. During the year, Alex Whitehouse and Duncan Leggett both participated in the Group’s DC pension plan.
The table below provides details of the executive directors’ pension benefits in FY21/22:
Company contributions to
Group’s DC pension plan
£’000
Cash in lieu of contributions
to DC-type pension plan
£’000
Alex Whitehouse 4 9
Duncan Leggett 4 9
Premier Foods plc
www.premierfoods.co.uk
 83
GOVERNANCE
Directors’ remuneration report CONTINUED
Annual bonus (executive directors) (audited)
Each year, the Committee sets individual performance targets and bonus potentials for each of the executive directors. Annually, the
Committee reviews the level of achievement against the performance targets set and, based on the Committee’s judgement, approves
the bonus of each executive director. Annual bonus payments are not pensionable.
Performance assessment for FY21/22
In line with the Remuneration Policy, for FY21/22, the CEO and CFO had maximum bonus opportunities of 125% of salary and 100% of
salary, respectively. Performance was measured against targets relating to Trading profit (50% weighting), Net debt (20% weighting),
strategic leadership (CEO: 20% weighting; CFO: 15% weighting), operational leadership (CFO only: 10% weighting) and ESG (CEO: 10%
weighting; CFO: 5% weighting).
The Committee undertook a full and detailed review of the performance of each executive director against their financial and non-financial
targets, including a ‘performance in the round’ assessment, which is set out below and in the Committee Chair’s Annual Statement.
As stated earlier in this annual report, despite a number of challenges the Group delivered a strong set of results in FY21/22. Trading
profit was £148.3m, which matched our performance last year and represented an increase of +11.9% versus two years ago, driven by
the effectiveness of the Group’s branded growth model performance. Net debt reduced to £268.9m (on a pre-IFRS 16 basis), as a result of
continued strong Trading profit and a reduction in interest payments and pension contributions.
The tables below set out performance compared to the financial and non-financial targets set at the start of the year.
Alex Whitehouse (audited)
Performance measure
Annual bonus FY21/22
Target Stretch
Performance
outcome Weighting
Performance
(% of max
bonus)
Financial targets (subject to a Trading profit underpin of £140.0m)
Trading profit £144.0m £148.0m £148.3m 50.0% 50.0%
Net debt (pre-IFRS 16) £286.0m £276.0m £268.9m 20.0% 20.0%
70.0% 70.0%
Performance measure Performance outcome Weighting
Performance
(% of max
bonus)
Non-financial targets (subject to a Trading profit underpin of £140.0m)
Strategic Finalised 5 Year strategic plan which was reviewed and approved by the
Board. Updated Group strategy to support the delivery of the strategic plan,
focused on 5 pillars to accelerate growth. Delivered first year of agreed
strategic road map, including:
International expansion: completed consumer and customer tests, route to
market and roll out of cake to the US market.
Inorganic expansion: reviewed options for potential targeted M&A activity to
expand into new categories.
Completed recruitment and integration of senior roles to deliver strategic
plan, including Corporate Development, Category expansion in the UK and
International and ESG.
20.0% 20.0%
Environment, Social
and Governance (ESG)
Planet
Delivered improved sustainability within packaging: Batchelor’s Pasta n Sauce
pots changed to paper-based packaging, and introduced recyclable plastics
for Oxo and Saxa pots.
Product
Increased core ranges with better-for-you options from 84% to 89%, including
the launch of Mr Kipling mixes and Batchelor’s low fat Super Noodle pots.
People
Sponsorship of Inclusivity & Diversity programme, new strategy in place with a
focus on increasing accessibility to leadership roles for women through enhanced
recruitment, development and mentoring programmes, resulting in female
representation within senior leadership roles increasing from 28% to 37%.
10.0% 10.0%
30.0% 30.0%
Final outcome 100.0% 100.0%
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 84
Duncan Leggett (audited)
Performance measure
Annual bonus FY21/22
Target Stretch
Performance
outcome Weighting
Performance
(% of max
bonus)
Financial targets (subject to a Trading profit underpin of £140.0m)
Trading profit £144.0m £148.0m £148.3m 50.0% 50.0%
Net debt (pre-IFRS 16) £286.0m £276.0m £268.9m 20.0% 20.0%
70.0% 70.0%
Performance measure Performance outcome Weighting
Performance
(% of max
bonus)
Non-financial targets (subject to a Trading profit underpin of £140.0m)
Strategic leadership Delivery and implementation of 5 Year strategic plan objectives for FY21/22,
including:
Successful refinancing delivered ahead of budget, resulting in a £8.0m
reduction in annual interest costs.
Led financial assessment and evaluation to support the review of targeted
M&A options.
15.0% 15.0%
Operational leadership Completed operational cost saving initiative, resulting in savings above target.
Delivered improvements in work capital with a focus on enhanced ways of
working within accounts receivable, which led to significant improvement in
aged debt, ahead of target.
10.0% 10.0%
Environment, Social
and Governance (ESG)
Sponsorship of TCFD working group and introduction of new processes to
enable the robust measurement, tracking and reporting of ESG targets.
5.0% 5.0%
30.0% 30.0%
Final outcome 100.0% 100.0%
The Committee considered the formulaic outcomes of the annual bonus assessment in the context of the current external environment,
wider company and individual performance, the shareholder experience, the customer experience and the treatment of colleagues
throughout the rest of the Group.
In addition to the operational highlights set out above, in FY21/22, Premier Foods has created over £180m of shareholder value, and
delivered a shareholder return of over 23% during the period, outperforming the FTSE 250 index (which was broadly flat in the period).
Furthermore, management continued to ensure that colleague safety and well-being remained a priority, the Group chose not to furlough
any colleagues or make any redundancies and no money was taken from the government funding schemes in respect of the pandemic.
The Committee believes that the executive directors continued to respond both decisively and effectively to the macro economic challenges
posed by the ongoing pandemic, labour shortages and significant inflationary pressures, enabling the Group to perform successfully during
FY21/22. In light of the Group’s excellent financial performance, the strategic progress, and focus on the well-being of employees, the
Committee concluded that the formulaic outcomes of the annual bonus assessment were justified, and no discretion was required.
Premier Foods plc
www.premierfoods.co.uk
 85
GOVERNANCE
Directors’ remuneration report CONTINUED
Long-Term Incentive Plan (LTIP)
Performance assessment for the 2019 LTIP award
The performance conditions for the 2019 LTIP award were based on a relative TSR condition (comprising two-thirds of the award) and an
adjusted EPS condition (comprising one-third of the award). The Committee assessed the two performance conditions in May 2022 and
concluded that both the relative TSR target and the adjusted EPS target had been fully achieved, which will result in full vesting of the LTIP
award in June 2022. The TSR of Premier Foods over the three-year performance period was 200%, representing significant shareholder
value creation and was significantly above the upper quartile TSR in the comparator group of circa 41%. The EPS performance of 12.1p was
ahead of target and market consensus. The Committee considered that the vesting reflected the underlying performance of the business
and was appropriate.
Alex Whitehouse was granted an award over 900,341 shares on 7 June 2019, and details of the vesting outcome are detailed in the
table below. Additional pro rata awards were granted to Alex Whitehouse (449,250 shares) and Duncan Leggett (435,220 shares) on 24
September 2020, reflecting the directors’ additional entitlements on appointment as CEO and CFO in 2019 (as set out in the table on page
88). The grant of the awards was delayed due the Company being in a prohibited period, however, the same performance conditions apply
to these awards which have now been met, although the awards will not vest until 24 September 2023.
Performance measure
Targets Outcome
No. of shares
to vest
Weighting
Below
threshold Threshold Stretch
Actual
performance Payout
Alex
Whitehouse
Relative TSR¹ 2/3 < Median Median Upper
quartile
3rd/4th out of
386 companies
100% 900,341
Adjusted EPS
2
1/3 < 10.1p 10.1p 11.1p 12.1p 100%
% of relevant portion of award
vesting
3
0% 20% 100%
1
Measured against the constituents of the FTSE All Share Index (excluding investment trusts) at the start of the period.
2
FY18/19 base year adjusted EPS was 8.5p.
3
Straight-line vesting between threshold and stretch.
Scheme interests awarded during the financial year (audited)
Deferred Bonus Plan (DBP)
One-third of any annual bonus payment awarded to executive directors is made in the form of shares. These shares are awarded under
the terms of the DBP, which was approved by shareholders in July 2017. Awards will normally be made within six weeks following the
announcement of the Group’s full year results in the form of nil cost options. The awards will normally vest on the third anniversary of grant
and, if awarded in the form of nil cost options, will then be exercisable up until the tenth anniversary of grant. The shares are subject to
forfeiture and clawback provisions. Details of the DBP award granted on 10 June 2021 based on a share price of 109p are set out below:
FY20/21 Annual
bonus
Bonus deferral
(one-third) Shares awarded Deferral period
Alex Whitehouse £625,000 £208,333 191,131 10.06.21 – 10.06.24
Duncan Leggett £298,375 £99,458 91,246 10.06.21 – 10.06.24
LTIP award for FY21/22
Details of the LTIP award granted on 10 June 2021 are set out below.
Basis of
award
Number of shares
awarded
Face value
on award date*
Performance
period
Alex Whitehouse 150% 688,073 £750,000 01.04.21 – 31.03.24
Duncan Leggett 100% 284,403 £310,000 01.04.21 – 31.03.24
* Determined based on the closing middle market quotation (MMQ) on the 5 dealing days ending 9 June 2021 of 109p.
Performance measure
Targets
Weighting
Below
threshold Threshold Target Stretch
Relative TSR
1
2/3 < Median Median N/A Upper quartile
Adjusted EPS
2
1/3 < 10.6p 10.6p 11.1p 11.6p
% of relevant portion of award vesting
3
0% 20% 50% 100%
1
Measured against the constituents of the FTSE All Share Index (excluding investment trusts) around the start of the period.
2
FY20/21 base year adjusted EPS was 11.0p.
3
Target EPS of 11.1p (at which 50% vests) with straight-line vesting between threshold and target and between target and stretch.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 86
For the FY21/22 award, the Committee used the same measures as
the FY20/21 LTIP award, i.e. relative TSR (two-thirds) and adjusted
EPS (one-third), which is aligned with the Company’s focus on
revenue, cost efficiency and cash generation in order to reduce Net
debt and improve shareholder return over the medium-term. The
Committee believes that these measures are fully aligned with the
interests of shareholders and that awards will only vest following
the achievement of stretching performance targets. When setting
the targets, the Committee also considered the potential impact of
the current Covid-19 pandemic.
The TSR condition requires at least a median ranking to be achieved
for 20% of this part of the award to vest, with full vesting taking
place for an upper quartile ranking against the constituents of
the FTSE All Share Index (excluding investment trusts), which was
considered an appropriate index to use as it includes a wide range
of companies, including the members of the FTSE 250 Index.
The adjusted EPS target is 11.1p, with a range of 10.6p at threshold
to 11.6p at maximum. In setting these targets, the Committee took
into account the financial plan and potential longer-term impact
of Covid-19, the change in corporation tax rate to 25% and analyst
consensus forecasts. The Committee has set stretching targets for
the three-year performance period, with targets set to ensure that
participants are motivated to deliver shareholder value without
excessive risk-taking. In line with its usual approach, the Committee
will review performance in the round to ensure that final vesting
outcomes reflect the broader business and individual context in the
period.
Dilution limits
Awards under certain executive and all-employee share plans may
be satisfied using either newly issued shares or shares purchased in
the market and held in the Group’s Employee Benefit Trust (which
held 2,989,069 shares as at 2 April 2022). The Group complies with
the Investment Association guidelines in respect of the dilutive
effect of newly issued shares. The current dilutive impact of share
awards over a 10-year period is approximately 5.0%.
Share ownership guidelines, vesting
and retention periods
To align executive directors’ interests with those of shareholders,
the 2020 Remuneration Policy increased the multiple of salary that
the executives must hold in shares from 100% of salary to 200%
of salary (valued at year end). The Committee will review progress
against the requirements, noting that the executive directors are
expected to retain 50% of shares from vested awards under the
Deferred Bonus Plan (DBP) and the LTIP (other than sales to settle
any tax or NICs due) until the target is reached. Retention periods
have been introduced for both the annual bonus scheme and LTIP
to encourage a focus on the long-term sustainable development of
the business. One-third of any annual bonus award is deferred into
shares for three years under the DBP and any shares which vest
under LTIP awards granted since 2018 will be deferred for a further
two-year period.
Y1 Y2 Y3 Y4 Y5
Annual bonus (DBP) n n n n
LTIP n n n n n
n Performance period
n Retention period
Post-employment shareholding guideline
As set out in last year’s Directors’ Remuneration Report, our
current approach to incentives is designed to ensure that executive
directors continue to have significant shareholdings for at least
two years after departure (and in many cases longer), which are
subject to robust clawback and malus provisions. Under our current
policy, in the case of a ‘good leaver’, unvested share awards on
cessation (both deferred bonuses and long-term incentive awards)
continue to vest at their normal vesting date, which can be up to
three years from the date of cessation (i.e. three years from grant).
In addition, there is a two-year post-vesting holding period which
applies to long-term incentive awards which will continue post-
cessation. As a result, executive directors will need to hold any
shares subject to vested awards for up to two years from cessation
and will need to hold shares that vest post-cessation for two years
post-vesting. In the latter case, for an award granted in the last year
of employment, this means the executive director would need to
hold any shares that vest for up to five years from cessation (i.e. five
years from grant of the award).
The members of the Remuneration Committee reviewed the
recommendation set out in the UK Corporate Governance
Code regarding the introduction of a formal post-employment
shareholding guideline. It was felt that the current arrangements
provide an adequate disincentive against inappropriate short-term
actions by departing executive directors. Extending post-cessation
shareholding arrangements further, in either quantum or duration,
was not judged to be appropriate by the Committee, as executive
directors would no longer have the ability to influence the strategic
direction or financial performance of the business, which operates
in a dynamic and fast-changing FMCG environment. This will be
reviewed by the Committee as part of its preparation of the 2023
Remuneration Policy.
Share ownership for the wider Group
The Committee recognises the importance of aligning colleagues’
interests with those of shareholders and encourages share
ownership in order to increase focus on the delivery of shareholder
return. All members of the ELT participate in the LTIP. Participation
in the Sharesave Plan currently represents approximately 31% of
colleagues.
Premier Foods plc
www.premierfoods.co.uk
 87
GOVERNANCE
Directors’ remuneration report CONTINUED
Statement of directors’ shareholding and share interests (audited)
The following table shows executive directors’ interests in Company shares. Awards under the LTIP are subject to a three-year vesting
period and will only vest if stretching performance conditions are met. In July 2017, the Company adopted a two-year holding period post
vesting. The figures shown represent the maximum number of shares a director could receive following the end of the vesting period if all
performance targets were achieved in full.
Share ownership guidelines and share interest table (audited) FY21/22
Shares
owned as at
2 April 2022
Shares
owned as at
3 April 2021
Share
ownership
1
DBP
Awards
LTIP
Awards
(vested)
LTIP
Awards
(unvested)
Sharesave
Awards Total
Alex Whitehouse 452,678 444,518 135% 329,385 1,005,349 3,077,809 20,474 4,885,695
Duncan Leggett 106,811 98,771 37% 125,535 53,833 1,121,082 20,474 1,427,735
1
The Shareholding guidelines require executive directors to hold 200% of their salary in shares, the percentage stated includes the post-tax value of awards held under the
Deferred Bonus plans and vested LTIP awards.
Executive share awards (audited)
Date of
grant
Balance
as at
3 April
2021
Awarded
in the year
Exercised
in the
year
Vested
in the
year
2
Lapsed
in the
year
Balance
as at
2 April
2022
Option
price
Share
price
on
date of
grant
Share
price on
date of
exercise
Date of
vesting/
becomes
exercisable
Maximum
Expiry
date
Alex Whitehouse
LTIP
1
13.06.17 225,852 – – – – 225,852 40.50 – 13.06.20 12.06.24
08.08.18 779,497 – – 779,497 – 779,497 41.20 – 08.08.21 07.08.25
07.06.19 900,341 – – – – 900,341 34.00 – 07.06.22 06.06.26
25.06.20 1,040,145 – – – – 1,040,145 69.50 – 25.06.23 24.06.27
24.09.20 449,250 – – – – 449,250 89.00 – 24.09.23 24.09.27
10.06.21 – 688,073 – – – 688,073 108.60 – 10.06.24 09.06.31
DBP 25.06.20 138,254 – – – – 138,254 – 69.50 – 25.06.23 25.06.30
10.06.21 – 191,131 – – – 191,131 – 108.59 – 10.06.24 10.06.31
Sharesave
Plan
2
17.12.18 8,160 – 8,160 – – - 30.00 33.00 – 01.02.22 31.07.22
16.12.19 8,876 – – – – 8,876 29.20 37.20 – 01.02.23 31.07.23
15.12.20 7,531 – – – – 7,531 71.70 95.00 – 01.02.24 31.07.24
16.12.21 – 4,067 – – – 4,067 83.20 104.00 – 01.02.25 31.07.25
883,271 8,160 779,497 – 4,433,017
Duncan Leggett
LTIP
1
13.06.17 53,833 – – – – 53,833 – 40.50 – 13.06.20 12.06.24
25.06.20 401,459 – – – – 401,459 – 69.50 – 25.06.23 24.06.27
24.09.20 435,220 – – – – 435,220 – 89.00 – 24.09.23 24.09.27
10.06.21 – 284,403 – – – 284,403 – 108.60 – 10.06.24 10.06.31
DBP 25.06.20 34,289 – – – – 34,289 – 69.50 – 25.06.23 25.06.30
10.06.21 – 91,246 – – – 91,246 – 108.60 – 10.06.24 10.06.31
Sharesave
Plan
2
17.12.18 8,160 – 8,160 – – – 30.00 33.00 – 01.02.22 31.07.22
16.12.19 8,876 – – – – 8,876 29.20 37.20 – 01.02.23 31.07.23
15.12.20 7,531 – – – – 7,531 71.70 95.00 – 01.02.24 31.07.24
16.12.21 – 4,067 – – – 4,067 83.20 104.00 – 01.02.25 31.07.25
379,716 8,160 – – 1,320,924
1
The 2018 LTIP for Alex Whitehouse includes 6,959 shares representing notional dividends paid during the performance period, up until the date of vesting on 8 August 2021. The
Remuneration Committee has determined that the TSR and EPS elements of the 2019 LTIP will vest in full in June 2022 (see page 86 for more information).
2
Executive directors are eligible to participate in the Group’s Sharesave Plan on the same basis as all other eligible employees. Alex Whitehouse and Duncan Leggett were granted
an award over 4,067 shares under the all employee Sharesave plan on 16 December 2021. An amount of £846 has been included within taxable benefits which represents the
20% discount to the share price immediately prior to the offer.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 88
Total shareholder return
The market price of a share in the Company on 1 April 2022 (the last trading day before the end of the financial period) was 115.6p; the
range during the financial period was 92.6p to 122.2p.
This graph shows the value, by 2 April 2022, of £100 invested in Premier Foods plc on 31 December 2011, compared with the value of £100
invested in the FTSE Food Producers Index and FTSE 250 (excluding Investment Trusts) Index on the same date. The Committee previously
used the FTSE All Share Index as a comparator but has decided to move to using the FTSE 250 Index, recognising that the Company is now
an established member of the FTSE 250 and to align with the index used to measure TSR performance within the LTIP going forward. The
Committee considers these to be the most appropriate comparator indices to assess the performance of the Group, given the Group’s
position as a FTSE 250 Food Producer. The other points plotted are the values at intervening financial year-ends.
Share graph
0
50
100
150
200
250
300
350
Value (£) (rebased)
Premier Foods FTSE 250 (excluding Investment Trusts) FTSE Food Producers
Chief Executive’s single figure for total remuneration
The table below shows the single figure for total remuneration and the annual bonus and LTIP vesting as a percentage of maximum
opportunity for the previous 10 financial periods.
Year CEO
Single figure
for total
remuneration
Annual bonus
as a % of
maximum
LTIP
vesting as a % of
maximum
FY21/22 Alex Whitehouse £2,199,850 100% 100%
FY20/21 Alex Whitehouse
2
£2,025,254 100% 100%
FY19/20 Alex Whitehouse
1
£742,575 81.5% 33.3%
FY19/20 Alastair Murray
1
£683,776 64.2% 33.3%
FY18/19 Alastair Murray £158,297 53.0% –
FY18/19 Gavin Darby £1,241,708 60.0% –
FY17/18 Gavin Darby £1,229,383 35.0% –
FY16/17 Gavin Darby £862,455 – –
FY15/16 Gavin Darby £1,750,933 57.0% –
FY14/15 Gavin Darby £1,736,749 23.4% –
FY13 Gavin Darby £1,405,753 16.0% –
FY13 Michael Clarke £1,122,795 – –
FY12 Michael Clarke £1,699,575 66.0% –
1
Alex Whitehouse was appointed as CEO on 30 August 2019 and Alastair Murray stepped down as Acting CEO and Chief Financial Officer.
2
The figures for FY20/21 have been adjusted, in line with statutory reporting requirements, to show the actual value upon vesting of the LTIP award on 8 August 2021. Full details
of the single figure for total remuneration are set out on page 83.
Premier Foods plc
www.premierfoods.co.uk
 89
GOVERNANCE
Directors’ remuneration report CONTINUED
Percentage change in remuneration of directors and employees
For the purpose of this table, remuneration is defined as salary, benefits and annual bonus. Where directors have been appointed part way
through the prior financial year, comparative figures have been calculated using an annualised figure. Tania Howarth, Lorna Tilbian and Roisin
Donnelly were appointed as non-executive directors on 1 March, 1 April and 1 May 2022, respectively. Yuichiro Kogo and Daniel Wosner do
not receive a fee. The directors are the only employees of the Company, so the average pay of the wider Group has also been included for the
purposes of comparison.
Change in pay FY21/22 Change in pay FY20/21
Base salary
% Change
FY21/22
Benefits
% Change
FY21/22
Annual
bonus
% Change
FY21/22
Base salary
% Change
FY20/21
Benefits
% Change
FY20/21
Annual
bonus
% Change
FY20/21
Executive directors
Alex Whitehouse +3.2% +0.2% +1.5% +5.3% -5.7% +61.4%
Duncan Leggett +12.5% -1.8% +9.1% +12.7% +4.5% +33.1%
Non-executive directors
Colin Day +0.8% – – 0% – –
Richard Hodgson 0% – – 0% – –
Simon Bentley 0% – – 0% – –
Roisin Donnelly – – – – – –
Tim Elliott 0% – – 0% – –
Tania Howarth 0% – – – – –
Helen Jones 0% – – 0% – –
Yuichiro Kogo – – – – – –
Pam Powell 0% – – 0% – –
Lorna Tilbian – – – – – –
Daniel Wosner – – – – – –
All Group employees -0.8% – +40.7% +5.6% – +49.3%
Senior management and the wider workforce
The remit of the Committee includes the oversight of remuneration for senior management (who are defined as the Group’s Executive
Leadership Team and Senior Leadership Team) as well as reviewing workforce remuneration and related policies, and the alignment of
incentives and rewards with culture. Remuneration for executive directors is set within the context of the Group’s remuneration policy for
the wider workforce. The key differences of quantum and structure in pay arrangements across the Group reflect the different size of roles
and levels of accountability required for the role and that executive directors and senior management have a much greater emphasis on
performance-based pay through the annual bonus and the LTIP.
Salaries for management grades are normally reviewed annually (currently in July each year) and take account of both business and
personal performance. Specific arrangements are in place at each site, which may be annual arrangements or form part of a longer-term
arrangement, and the Board is kept regularly updated on these arrangements.
The Committee reviews the level of salary increases for colleagues not involved in collective bargaining and also reviews the annual
bonus plan for the general management population. Financial objectives for executive directors and the management population are
aligned and strategic objectives are cascaded down the management structure. In FY18/19, the Committee approved changes to the
management bonus scheme to make it more competitive and to help aid recruitment and retention. Senior management participate in
long-term incentive arrangements, reflecting their contribution to Group performance and enhancing shareholder value. All employees are
encouraged to own shares in the Company via the Sharesave Plan and executive directors through our shareholding guidelines.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 90
CEO pay ratio
The table below sets out a comparison of the CEO’s total earnings as compared to the wider workforce based on colleagues’ pay at the 25th
percentile, median and 75th percentile. Premier Foods is a food manufacturing business employing around 4,000 colleagues, the majority
of whom are based at our manufacturing sites.
We apply the same reward principles for all colleagues – that overall remuneration should be competitive when compared to similar roles
in similar organisations. For manufacturing colleagues, we benchmark against the general pay conditions for similar roles in the relevant
local area, including other food manufacturers. For the CEO, we benchmark against salaries at companies with a similar level of turnover,
enterprise value and complexity. The key differences of quantum and structure in pay arrangements between the CEO and the majority of
colleagues reflect the different levels of overall accountability, responsibilities, skill and experience required for the role. The CEO’s pay has
a much greater emphasis on performance-based pay through the annual bonus and the LTIP. The ratios may therefore vary significantly
year-on-year depending on bonus and LTIP outcomes.
Year Method 25th percentile Median
Pay ratio
75th percentile
FY21/22 B 76:1 64:1 48:1
FY20/21 B 82:1 61:1 49:1
FY19/20 A 60:1 49:1 35:1
FY21/22 Base salary £26,972 £24,729 £40,524
FY21/22 Total pay and benefits £29,085 £34,540 £44,613
The CEO single figure for total remuneration was £2,199,850 (FY20/21: £2,025,254), as set out on page 83 of this report. The single figure
(and associated percentile ratios) for FY20/21 have been adjusted, in line with statutory reporting requirements, to show the actual value
upon vesting of the LTIP award on 8 August 2021. The main reason for the change in ratios from last year is an increase in the value of
bonus and pension contributions, included within total pay and benefits, for the three colleagues selected, and an increase in overall
variable pay for the CEO. The Committee confirms that the ratio is consistent with the Company’s wider policies on employee pay, reward
and progression.
The Group has calculated the ratio in line with the reporting regulations using method B, which uses the most recent hourly rate gender
pay gap information for all UK employees of the Company to identify three UK employees as the best equivalents. This uses data which is
already reported externally as part of the Group’s gender pay gap reporting. Due to the fact that the Group has a significant number of part-
time employees and a range of different weekly working hours and shift allowances at various sites, the calculation of comparable full-time
equivalents under method A was considered particularly complex. The results for this year were checked against colleagues pay at either
side of the data points selected, to ensure the results were representative and the figures provided are considered to be reflective of pay at
the relevant sites where the colleagues are based. No adjustments or estimates have been used.
The workforce comparison is based on:
1. Payroll data as at 5 April 2021 for all colleagues, including part time colleagues and the CEO but excluding non-executive directors.
2. Total pay comprising salary and taxable benefits (including shift allowance, overtime, car allowance and performance related pay).
Employers’ pension contributions are not included in the data under the requirements of the gender pay gap reporting but have
been included in the total pay and benefits figures for the three colleagues listed in the table above for comparative purposes.
Gender pay gap reporting
Details of gender pay gap reporting are provided on page 167 and the report is available of the Group’s website.
Payments for loss of office (audited)
There were no payments for loss of office in the year (FY20/21: £Nil).
Payments to former directors (audited)
There were no payments to former directors in the year (FY20/21: £Nil).
Premier Foods plc
www.premierfoods.co.uk
 91
GOVERNANCE
Directors’ remuneration report CONTINUED
Relative importance of spend on pay
The following table sets out the amounts and percentage change in total employee costs and distributions to shareholders (dividends and
share buy backs). The Company has recommended the payment of a final dividend of 1.20p per share for the financial period, subject to
shareholder approval at the AGM in July 2022, which represents a 20% increase on the prior year. The employee costs figure for FY20/21
includes a GMP equalisation charge of £2.9m, excluding this, total employee costs increased by +1.9% versus the prior year.
FY21/22 FY20/21
Increase /
Decrease
Total employee costs £183.0m £182.5m +0.3%
Distributions to shareholders £8.5m £Nil N/A
Non-executive directors
Fees payable to non-executive directors are determined by the Board. The level of fee is set in the context of the time commitment and
responsibilities required by the role. As a result, additional fees are payable to the Chairs of the Audit and Remuneration Committees and
also for the role of Senior Independent Director. No change has been made to the basic NED fee since 2009.
Non-executive directors (audited)
Single figure for the total remuneration received by each non-executive director for the financial periods ended 2 April 2022 and 3 April 2021.
Director
Basic fee
£
Committee
Chair fee
£
SID fee
£
Total fees
FY21/22
£
Total fees
FY20/21
£
Colin Day 216,667 – – 216,667 215,000
Richard Hodgson 57,000 – 10,000 67,000 67,000
Simon Bentley 57,000 13,000 – 70,000 70,000
Roisin Donnelly
1
– – – – –
Tim Elliott 57,000 – – 57,000 49,988
Tania Howarth
1
4,750 – – 4,750 –
Helen Jones 57,000 – – 57,000 49,988
Yuichiro Kogo
2
– – – – –
Pam Powell 57,000 10,500 – 67,500 67,500
Lorna Tilbian
1
– – – – –
Daniel Wosner
2
– – – – –
1
Tania Howarth, Lorna Tilbian and Roisin Donnelly were appointed as non-executive directors on 1 March, 1 April and 1 May 2022, respectively. Helen Jones and Tim Elliott were
both appointed as non-executive directors on 15 May 2020.
2
Yuichiro Kogo and Daniel Wosner were appointed pursuant to relationship agreements with two of our major shareholders and did not receive a fee for their roles as non-executive
directors.
Non-executive directors’ fees
The fees of our non-executive directors (NEDs) are set out below. A review of non-executive directors’ fees was last undertaken by the
Board in March 2022. The Committee considered the Chair’s fee, noting the significant contribution the Chair had made to the Group since
appointment, the successful turnaround in the Group’s performance and also the significant time commitment for the role, and it was
agreed that it would be appropriate to increase the Chair’s fee to £235,000 with effect from 1 March 2022. No increase was recommended
for the NEDs fees.
2 April
2022 Change
3 April
2021
Chair’s fee £235,000 9.3% £215,000
Basic NED fee £57,000 – £57,000
Additional remuneration:
Audit Committee Chair fee £13,000 – £13,000
Remuneration Committee Chair fee £10,500 – £10,500
Senior Independent Director fee £10,000 – £10,000
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 92
Non-executive directors’ terms of appointment
All non-executive directors have entered into letters of appointment/amendment as detailed in the table below. The appointments are
subject to the provisions of the Companies Act 2006 and the Company’s Articles. Terms of appointment are normally for three years or
the date of the AGM immediately preceding the third anniversary of appointment. Non-executive directors’ continued appointments
are evaluated annually, based on their contributions and satisfactory performance. Following the expiry of a term of appointment, non-
executives may be reappointed for a further three-year period. The terms of appointment for Yuichiro Kogo and Daniel Wosner are
governed by the terms of the relationship agreements between the Company and Nissin and Oasis, respectively.
Director Date of original appointment
Expiry of current
appointment/amendment
letter Notice period
Alex Whitehouse 30 August 2019 – 6 months
Duncan Leggett 10 December 2019 – 6 months
Colin Day 30 August 2019 AGM 2022 3 months
Richard Hodgson 6 January 2015 AGM 2023 3 months
Simon Bentley 27 February 2019 AGM 2024 3 months
Roisin Donnelly 1 May 2022 AGM 2025 3 months
Tim Elliott 15 May 2020 AGM 2023 3 months
Tania Howarth 1 March 2022 AGM 2024 3 months
Helen Jones 15 May 2020 AGM 2023 3 months
Yuichiro Kogo 25 March 2021 – –
Pam Powell 7 May 2013 AGM 2022 3 months
Lorna Tilbian 1 April 2022 AGM 2024 3 months
Daniel Wosner 27 February 2019 – –
Non-executive directors’ interests in shares (audited)
NED
Ordinary shares
owned as at
2 April 2022
Ordinary shares
owned as at
3 April 2021
Colin Day 200,000 200,000
Richard Hodgson – –
Simon Bentley – –
Tania Howarth
1
– N/A
Roisin Donnelly
1
N/A N/A
Tim Elliott 10,000 10,000
Tania Howarth
1
– N/A
Helen Jones 10,000 –
Yuichiro Kogo
2
– –
Pam Powell 160,366 160,366
Lorna Tilbian
1
– N/A
Daniel Wosner
2
72,850 72,850
3
Tania Howarth, Lorna Tilbian and Roisin Donnelly were appointed as non-executive directors on 1 March, 1 April and 1 May 2022, respectively.
4
Yuichiro Kogo and Daniel Wosner are shareholder representative directors appointed pursuant to relationship agreements with two of our largest shareholders.
Statement of implementation of remuneration policy in FY22/23
Base salary and fees
The table below shows the base salaries of the executive directors as of 2 April 2022. As noted previously, the CEO’s and CFO’s salaries are
now positioned at around the lower quartile of the FTSE 250. Any salary increases in FY22/23 are therefore expected to be in line with
those awarded to all colleagues not involved in collective bargaining.
Executive director
Salary as at
2 April 2022
Alex Whitehouse £510,000
Duncan Leggett £350,000
The Committee will continue to keep the Executive Directors’ salaries under review as the Company’s size and complexity continues to increase.
Benefits
Benefits for FY22/23 will be in line with the approved Remuneration Policy.
Pension
Pension entitlements for FY22/23 will be in line with the approved Remuneration Policy and on the same basis as all other UK employees.
Executive directors will receive a contribution of 7.5% of basic pay up to an earnings cap (£181,800 for the 2022/23 tax year).
Premier Foods plc
www.premierfoods.co.uk
 93
GOVERNANCE
Directors’ remuneration report CONTINUED
Annual bonus measures for FY22/23
The Committee agreed that, for FY22/23, the financial targets
would represent 70% of the total bonus opportunity. The
performance measures will be linked to the Group’s strategy to
focus on revenue growth, cost efficiency and cash generation with
the aim to deliver the Group’s growth strategy. As set out in the
Annual Statement, the Committee reviewed the financial goals and
agreed that in order to support the Group’s growth strategy, going
forward operating cash flow would replace Net debt as the second
financial measure. Trading profit is a Group KPI (see page 21). Non-
financial objectives are focused on strategic opportunities to drive
sales, generate cost savings and improve free cash flow in support
of the Group’s growth strategy. The element relating to ESG is
aligned with the delivery of the Group’s ESG strategy, the Enriching
Life Plan (see pages 24 to 35 for more information). In addition, the
weighting of ESG measures for the CEO and CFO has been aligned,
reflecting management’s increased focus in this area. The Board
considers the financial targets and the non-financial targets to be
commercially sensitive but has agreed that they will be disclosed as
part of the performance assessment in next year’s annual report.
The financial and non-financial targets both contain Trading profit
underpins.
One-third of any annual bonus awarded in respect of FY22/23
will be deferred in shares for three years under the Deferred
Bonus Plan.
Alex
Whitehouse
Duncan
Leggett
Maximum opportunity as a % of salary 125% 100%
Performance measure Weighting Weighting
Financial objectives (subject to a Trading profit underpin)
Trading profit 50% 50%
Operating cash flow 20% 20%
70% 70%
Non-financial objectives (subject to a Trading profit underpin)
Strategic 20% 20%
Environmental, Social and Governance 10% 10%
100% 100%
LTIP award for FY22/23
For the FY22/23 award, the Committee proposes to use the same
measures as the FY21/22 LTIP award, i.e. relative TSR and adjusted
EPS), which is aligned with the Group’s growth strategy to focus
on revenue and profit growth, cost efficiency and cash generation
in order to generate shareholder return over the medium-term.
The weighting of the performance measures has been re-balanced
such that they are equally weighted (previous two-thirds TSR and
one-third EPS). This approach gives a greater focus to financial
performance which is aligned with the Group’s growth strategy. It
was felt that this would also encourage investment in the business
and ultimately drive profitable growth.
The Committee believes that these measures are fully aligned
with the interests of shareholders and that awards will only vest
following the achievement of stretching performance targets.
The TSR condition requires at least a median ranking to be achieved
for 20% of this part of the award to vest, with full vesting taking
place for an upper quartile ranking against the constituents of the
FTSE 250 Index (excluding investment trusts), which is considered
an appropriate index to use as the Company is now an established
member of the FTSE 250 Index.
The adjusted EPS target is 11.9p, with a range of 11.4p at threshold
to 12.4p at maximum. In setting these targets, the Committee
took into account the Group’s 5-year Strategic plan, the impact of
the change in corporation tax rate from 19% to 25% and analyst
consensus forecasts. The Group currently retains brought forward
losses which it can utilise to offset against future tax liabilities and
therefore tax is currently a non-cash item for Premier Foods. The
Committee noted that a notional tax charge is included for the
purposes of calculating EPS and therefore the increase in tax rate
would reduce the EPS outcome in FY24/25. The Committee has
set stretching targets for the three-year performance period, with
targets set to ensure that participants are motivated to deliver
shareholder value without excessive risk-taking. In line with its
usual approach, the Committee will review performance in the
round to ensure that final vesting outcomes reflect the broader
business and individual context in the period.
Basis of
award
Face value on
award date
Performance
period
Alex Whitehouse 150% £765,000 01.04.22 – 31.03.25
Duncan Leggett 100% £350,000 01.04.22 – 31.03.25
Performance measure
Targets
Weighting
Below
threshold Threshold Target Stretch
Relative TSR
1
50% < Median Median N/A Upper quartile
Adjusted EPS 50% < 11.4p 11.4p 11.9p 12.4p
% of relevant portion of award vesting
2
0% 20% 50% 100%
1
Measured against the constituents of the FTSE 250 Index (excluding investment trusts) around the start of the period.
2
Target EPS of 11.9p (at which 50% vests) with straight-line vesting between threshold and target and between target and stretch.
The Committee
Details of the Committee members and their meeting attendance
are set out on page 65. Pam Powell was appointed as Chair of the
Remuneration Committee on 30 May 2019, having served as a
member of the Remuneration Committee for six years. Throughout
the financial period, all members of the Committee have been
independent. In addition, the Chairman, CEO, HR Director and the
remuneration advisers attended Committee meetings by invitation.
In accordance with the Committee’s terms of reference, no one
attending a Committee meeting may participate in discussions
relating to his/her own terms and conditions of service or
remuneration. Over the course of the year, the Committee held five
meetings.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 94
Role of the Remuneration Committee
The Committee has been delegated authority by the Board
to approve the overall design of the Remuneration Policy for
executive directors and senior management, to agree the terms
of employment including recruitment and termination terms of
executive directors, approve the design of all share incentive plans,
recommend appropriate performance measures and targets for
the variable element of remuneration packages, and determine
the extent to which performance targets have been achieved.
The Committee’s remit has also been extended to review the
remuneration arrangements for the wider workforce and to
ensure there is alignment between the Group’s remuneration
arrangements and culture.
The key activities of the Committee during the financial period were
as follows:
• Undertook a review of remuneration arrangements for
executive directors and the ELT to ensure they continue to
support the Group’s evolving strategy, and aid the retention and
recruitment of senior management;
• Approved changes to the operation of the annual bonus plan,
LTIP and the shareholding requirements below executive
director level;
• Together with the Board, received regular updates on the
remuneration arrangements for the wider workforce, and
the options to extend long-term incentive arrangements for
management below the ELT;
• Reviewed the ongoing impact of Covid-19 on performance and
remuneration outcomes;
• Considered the approach, scope and time lines for the 2023
Remuneration Policy review;
• Reviewed and discussed developments in best practice in order
to keep the Committee up to date with current market practice;
• Reviewed the voting results for the 2021 Directors’
Remuneration Report;
• Reviewed the FY21/22 annual bonus plan for management at
below Board level;
• Reviewed and recommended executive directors’ and senior
managers’ annual bonuses in respect of the financial period
and set the targets for the FY22/23 annual bonus, ensuring they
were aligned with the strategic objectives of the Group;
• Granted the 2021 awards under the Company’s all-employee
plans and monitored colleague participation; and
• Granted the 2021 awards under the Company’s executive share
plans to executive directors and senior managers and agreed
the targets for awards due to be made in 2022, ensuring they
are aligned with the strategic objectives of the Group.
Committee evaluation
As part of the internal Board evaluation exercise conducted
during the year (see page 67 for more information), a review of
the Committee’s effectiveness was also undertaken. The review
included the management of meetings, quality of papers and
presentations, an assessment of overall remuneration strategy and
whether it supported the delivery of the Group and ESG strategies,
the Committee’s understanding of remuneration arrangements
for the wider workforce and the views of key stakeholders. It was
confirmed that the Committee remained effective and an action
plan for the coming year was agreed. A review was also undertaken
of the performance of the Committee’s adviser, and it was
confirmed that they had performed effectively in supporting the
Committee over the period.
Advisers
Following a tender exercise undertaken in 2020, Deloitte LLP
(‘Deloitte’) was engaged to provide advice to the Committee
in January 2021. The Deloitte engagement team have no other
connection with the Group or its directors which are considered to
impair their independence. Deloitte is a founding member of the
Remuneration Consultants Group and, as such, adheres to its Code
of Conduct. The Committee is satisfied that the advice received
from Deloitte is objective and independent. During the financial
period, Deloitte received fees of £68,950 (FY20/21: £27,100
Deloitte, £29,878 Aon plc and £18,102 Alvarez & Marsal LLP), in
respect of their advice to the Committee.
External appointments
The Board is open to executive directors who wish to take on a
non-executive directorship with a publicly quoted company in
order to broaden their experience. Executives may be entitled to
retain any fees they receive. However, any such appointment would
be reviewed by the Board on a case-by-case basis. The current
executive directors do not hold any external appointments with
publicly quoted companies.
Statement of voting at Annual General Meeting
The details of the voting on the resolutions at the AGM held on
23 July 2021 are set out below (full details of the voting results
for each resolution are available on the Group’s website: www.
premierfoods.co.uk).
Approval of Directors’
Remuneration Report
FY20/21
% of votes
cast
Approval of the current
Directors’ Remuneration
Policy
% of votes
cast
Date of AGM 23 July 2021 12 August 2020
Votes for 670,891,177 97.53% 569,672,002 96.65%
Votes against 17,003,876 2.47% 19,748,413 3.35%
Total votes cast 687,895,053 100% 589,420,415 100%
Votes withheld 254,200 229,811
The Directors’ Remuneration Report was approved by the Board on 18 May 2022 and signed on its behalf by:
Pam Powell
Remuneration Committee Chair
Premier Foods plc
www.premierfoods.co.uk
 95
GOVERNANCE
Other statutory information
Directors’ report
The directors’ report consists of pages 08 to 99 and has been
drawn up and presented in accordance with, and in reliance upon,
applicable English company law and the liabilities of directors in
connection with that report shall be subject to the limitations and
restrictions provided by such law. In the directors’ report, references
to the Company or Group, are references to Premier Foods plc and its
subsidiaries.
Profit and dividends
The profit before tax for the financial year was £102.6m (FY20/21:
profit of £122.8m) and the directors have proposed a final dividend
of 1.20 pence per share for the financial period ended 2 April 2022
(FY20/21: 1.0 pence), representing a 20% increase on prior year.
Subject to shareholder approval, the final dividend will be payable
on 29 July 2022 to shareholders on the register at the close of
business on 1 July 2022.
Over the last few years, the Company has made significant progress
in deleveraging the business and reducing Net debt to a level that
would enable the payment of a dividend (see KPIs on page 21). In
February 2021, the Company completed a capital reduction in order
to provide greater flexibility in how the Company manages its capital
resources going forward. As a result of this, the Company was able
to pay a dividend of 1.0 pence per share to shareholders on 30 July
2021. This represents the first dividend payment by the Company
since 2008, and is further demonstration of the improved strength of
the business and the continued delivery of its growth strategy.
Research and development
Applied research and development work continues to be directed
towards the introduction of new and improved products; the
application of new technology to reduce unit and operating
costs; and to improve service to customers. Total research and
development spend (including capitalised development costs) was
£11.4m (FY20/21: £13.2m).
Branches
Certain of the Group’s activities are operated through overseas
branches which are established in a number of countries and
subject to the laws and regulations of those jurisdictions.
Share capital information
The Company’s issued share capital as at 2 April 2022 comprised
862,785,277 ordinary shares of 10p each. During the period
4,158,472 ordinary shares were allotted to satisfy the vesting of
awards made under the all-employee Sharesave Plan and 3,500,000
were allotted to satisfy the vesting of awards made under the LTIP,
details of the movements can be found in note 22 on page 153. All
of the ordinary shares rank equally with respect to voting rights and
the rights to receive dividends and distributions on a winding up.
In accordance with the Articles, there are no restrictions on share
transfers, limitations on the holding of any class of shares or any
requirement for prior approval of any transfer with the exception
of certain officers and employees of the Company who are required
to seek prior approval to deal in the shares of the Company and are
prohibited from any such dealing during certain periods under the
requirements of the EU Market Abuse Regulation.
Colleagues who hold shares under the Premier Foods plc Share
Incentive Plan may instruct the trustee to vote on their behalf in
respect of any general meeting.
The directors were granted authority at the 2021 AGM to allot
relevant securities under two separate resolutions (i) up to one-third
of the Company’s issued share capital; and (ii) up to two-thirds of the
Company’s issued share capital in connection with a rights issue. This
authority will apply until the conclusion of the 2022 AGM. A similar
authority will be sought from shareholders at the 2022 AGM. The
Company does not currently have authority to purchase its own shares,
and no such authority is being sought at the 2022 AGM.
Significant contracts – change of control
The Company has various borrowing arrangements, including
a revolving credit facility and Senior Secured notes. These
arrangements include customary provisions that may require any
outstanding borrowings to be repaid and any outstanding notes
to be repurchased upon a change of control of the Company. In
addition, the Cadbury licensing agreement also includes a change
of control provision, which could result in the agreement being
terminated or renegotiated if the Company were to undergo a
change of control in certain limited circumstances.
The Company’s executive and all-employee share plans contain
provisions, as a result of which, options and awards may vest and
become exercisable on a change of control in accordance with the
plan rules.
Articles of association
The Company’s Articles (which are available on the Group’s
website www.premierfoods.co.uk) may only be amended by a
special resolution at a general meeting. Subject to the provisions
of the statutes, the Company’s articles and any directions given by
special resolution, the directors may exercise all the powers of the
Company.
Substantial shareholdings
Information provided to the Company pursuant to the Financial
Conduct Authority’s (FCA) Disclosure and Transparency Rules
(DTRs) is published on a Regulatory Information Service and on the
Company’s website. As at 18 May 2022, the Company has been
notified of the following interests of 3% or more in the Company:
Shareholder
Ordinary
shares
1
% of share
capital
2
Nissin Foods Holdings Co., Ltd. 164,486,846 19.06
Oasis Management Company Ltd
3
76,379,841 8.85
JPMorgan Chase & Co.
3
44,559,230 5.16
Kempen Capital Management N.V. 42,810,000 4.96
M&G Plc 34,916,779 4.05
1
Number of shares held at date of notification.
2
Percentage of share capital as at 2 April 2022.
3
Held in the form of shares and as a total return swap.
Powers of directors
The powers of the directors are set out in the Company’s Articles of
Association and may be amended by way of a special resolution of
the Company.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 96
Director appointments
The Board has the power to appoint
one or more additional directors. Under
the Articles any such director holds
office until the next AGM when they are
eligible for election. Shareholders may
appoint, reappoint or remove directors
by an ordinary resolution. In addition,
the appointment of Yuichiro Kogo and
Daniel Wosner are subject to the terms of
shareholder relationship agreements (see
Conflicts of interest on page 66).
Directors’ and officers’
liability insurance
This insurance covers the directors and
officers against the costs of defending
themselves in civil proceedings taken
against them in their capacity as a director
or officer of the Company and in respect of
damages resulting from the unsuccessful
defence of any proceedings.
Access to external advice
Directors are allowed to take independent
professional advice in the course of their
duties. In addition, all directors have access
to the advice and services of the Company
Secretary. If any director were to have a
concern over any unresolved business issue
following professional advice, they are
entitled to require the Company Secretary
to minute that concern. Should they later
resign over a concern, non-executive
directors are asked to provide a written
statement to the Chairman for circulation
to the Board.
Political donations
The Company’s policy is not to make
political donations and no such donations
were made in the financial period.
Employment of people with
disabilities
It is our policy to give full and fair
consideration to applications for
employment received from people with
disabilities, having regard to their particular
aptitudes and abilities. Wherever possible
we will continue the employment of, and
arrange appropriate training for, employees
who have become disabled during the
period of their employment. We provide
the same opportunities for training, career
development and promotion for people
with disabilities as for other colleagues.
Greenhouse gas (GHG) emissions reporting
Premier Foods’ GHG emissions were calculated and reported based on the ‘The
Greenhouse Gas Protocol: GHG Protocol: A Corporate Accounting and Reporting Standard
– Revised Edition’ (GHG Protocol) and the complementary ‘Corporate Value Chain (Scope 3)
Accounting and Reporting Standard’ setting our boundaries to include all key requirements
and following an operational control approach. We used primary data from business units,
and operating and office sites. Where primary data wasn’t available estimates were made
with a choice of assumptions following a conservative approach. Emissions factors were
selected from a range of reputable sources including Ecoinvent 3.8, BEIS 2020 and 2021,
Agri-footprint and WFLDB (World Food LCA Database). All emissions values in this report
are given in metric tonnes of carbon dioxide equivalent (tCO2e).
All emissions are calculated using the GHG Protocol. We have developed a more detailed
approach for the calculation of our footprint with external support and all figures for
FY20/21 have been updated from those shown in the FY20/21 annual report. In the event
of future changes in operating infrastructure through acquisitions or divestments the
FY20/21 baseline will be recalculated to allow a consistent comparison of performance.
All of our energy use is based in the UK, we have no manufacturing or office facilities under
our control outside of the UK.
GHG emissions FY21/22 FY20/21
Scope 1 emissions (tCO
2
e) 37,621 39,113
Scope 2 emissions - gross location based (tCO
2
e) 18,567 21,247
Scope 2 emissions - net market based (tCO
2
e) 4 31,983
Total Scope 1 & 2 gross location based (tCO
2
e) 56,188 60,360
Change in Scope 1 & 2 emissions since FY20/21 - gross location
based (%) -6.9%
Total Scope 1 & 2 emissions net market based (tCO
2
e) 37,625 71,096
Change in Scope 1 & 2 since FY20/21 - net market based (%) -47.1%
Overall Scope 1 & 2 intensity (gCO
2
e per kg of product) - gross
location based 168.6 164.0
Change in Scope 1 & 2 emissions intensity since FY20/21 - gross
location based (%) 2.8%
Overall Scope 1 & 2 intensity (gCO
2
e per kg of product) net
market based 112.9 193.2
Change in Scope 1 & 2 emissions intensity since FY20/21 - net
market based (%) -41.6%
Production output (tonnes) 333,260 367,992
Total energy usage (MWh) 275,577 282,567
Energy usage ratio (MWh/t) 0.83 0.77
Scope 3 emissions (tCO
2
e) 1,139,062
Principal energy efficiency measures taken in FY21/22
As part of our recently launched Enriching Life Plan, we have set bold new targets to
decarbonise our own operations and support our suppliers to do the same. Energy
efficiency is a crucial element of this plan and we have launched a “Smart Energy”
programme under the leadership of our Operations Director. The programme will
coordinate the organisation’s work on energy efficiency through site energy councils
progressing behavioural changes and investments in new processes and equipment.
Both energy use and associated CO
2
e emissions are monitored monthly through our
internal environmental reporting and we are improving the quality of available information
by investing in metering equipment. This will allow us to more clearly identify improvement
opportunities and prioritise them based on their potential benefits.
Capital investments in this year include boiler upgrades and compressor renewals,
along with a continuation of our LED lighting programme and changes to distribution
infrastructure to facilitate more efficient vehicle loading and utilisation.
Further information on Scope 1, 2 and 3 emissions are set out in Additional disclosures on
page 164.
Premier Foods plc
www.premierfoods.co.uk
 97
GOVERNANCE
Other statutory information CONTINUED
Colleague engagement
The Board and its committees receive regular updates on workforce
matters, and this has been enhanced with the introduction of a
standing item covering the workforce which is reported to the
Board via the HR report each meeting. This includes:
• Updates on key issues raised at Voice Forums, which have been
established at sites across the business;
• Site based pay negotiations;
• Results of periodic employee engagement exercises and action
plans to address the issues raised; and
• All employee share schemes.
Additional feedback mechanisms via the Board’s Remuneration and
Audit Committees include:
• Understanding of remuneration arrangements for the
workforce across the business;
• Updates on the Management bonus scheme and pay
arrangements for colleagues across the business; and
• Periodic reporting of issues raised via the Company’s
confidential whistleblowing helpline and management’s
response to them.
Further information on how we have engaged with employees
during the financial period can be found in the following sections:.
• Workforce Engagement NED: page 64.
• Engaging with our stakeholders and Section 172(1) statement:
pages 69 to 71.
Colleague communication
We continue to place a high degree of importance on
communicating with colleagues at all levels of the organisation. In
recent years we have invested in this area, with large digital news
screens at every site, our mobile-enabled intranet, a weekly news
round-up email and posters.
We also video stream our colleague briefing sessions direct to
all sites, in addition to cascading it through local briefings. We
believe it is important to hear views from our colleagues in order
to understand how the working environment can be improved. In
our manufacturing sites, we have constructive relationships with
our Trade Union colleagues, while in head office we run ‘Listening
Groups’ and ‘Lunch and Learn’ events.
Anti-corruption and anti-bribery
The Group has in place an Anti-Bribery and Corruption Policy and
a code of conduct for third parties which provides guidance for
complying with anti-corruption laws. This is provided to graded
managers and those who operate in commercial roles, together
with formal training. This covers, amongst other things, guidance
on dealings with third parties, facilitation payments, gifts and
hospitality and charitable and political donations. We do not
tolerate any form of bribery or corruption and expect all colleagues,
business partners, suppliers, contractors, joint venture partners,
customers, agents, distributors and other representatives to act
in accordance with all laws and applicable Group policies. The
current Anti-Bribery and Corruption Policy was approved by the
Audit Committee in March 2021 and a summary is available on the
Group’s website.
Code of conduct and whistleblowing helpline
The Group is committed to ensuring that everyone that comes into
contact with the business is treated with respect, and their health,
safety and basic human rights are protected and promoted. The
Board has approved a code of conduct which sets out the standards
of behaviour all employees are expected to follow and provides a
useful guidance to help colleagues when it comes to making the
right decision. The code was introduced in 2012 and is updated
and reissued on a periodic basis. A copy of the code is included in
the induction pack for new joiners and is available on the Group’s
intranet and corporate website. The code is made up of 10 key
elements, including: acting honestly and complying with the law;
competing fairly; food safety; and treating people fairly.
We also have a confidential whistleblowing call line to enable
anyone who comes into contact with our business (whether
colleagues, contractors, agency workers, customers, suppliers
or distributors) to raise any concerns they have that cannot be
dealt with through the normal channels. Calls logged with the
whistleblowing service are followed up promptly by the appropriate
person within the business and the issues raised and management’s
response are reviewed by the Audit Committee. The Audit
Committee also reviews the whistleblowing service annually and
arranges for it to be refreshed and communicated to sites.
Modern Slavery
We are committed to tackling all forms of hidden labour
exploitation, including slavery and human trafficking, and we have
ensured that all new members of the Procurement team receive
specific training on modern slavery and trafficking as part of their
induction. The training utilises both internal and external training
resource materials and is tailored to raise awareness of the issues
around modern slavery in supply chains and to empower team
members to recognise and respond to indicators of human rights
abuse within the supply chain. Our Modern Slavery Statement is
reviewed and approved by the Board on an annual basis and is
available to view of the Group’s website.
Financial risk management
Details relating to financial risk management in relation to the use
of financial instruments by the Group can be found in note 18 of
the financial statements.
Going concern and viability statement
The directors have a reasonable expectation that the Company
and Group have adequate resources to continue in operational
existence for the next 12 months and therefore continue to adopt
the going concern basis in preparing the consolidated financial
statements. Further information on the basis of preparation is set
out in note 1.1 on page 115. The Company’s viability statement,
where the directors confirm that they have a reasonable
expectation that the Group will be able to continue in operation
and meet its liabilities as they fall due over the three-year period to
29 March 2025, is set out on page 58.
Related parties
Details on related parties can be found in note 26 on page 154.
Subsequent events
Details relating to subsequent events can be found in note 28 on
page 156.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 98
Statement of directors’ responsibilities
in respect of the annual report and the financial statements
The directors are responsible for preparing the Annual Report and
the Group and parent Company financial statements in accordance
with applicable law and regulations.
Company law requires the directors to prepare Group and parent
Company financial statements for each financial year. Under that
law they are required to prepare the Group financial statements in
accordance with UK-adopted international accounting standards
and applicable law and have elected to prepare the parent
Company financial statements in accordance with UK accounting
standards and applicable law, including FRS 101 Reduced Disclosure
Framework.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent Company and of
the Group’s profit or loss for that period. In preparing each of the
Group and parent Company financial statements, the directors are
required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable, relevant,
reliable and prudent;
• for the Group financial statements, state whether they have
been prepared in accordance with UK-adopted international
accounting standards;
• for the parent Company financial statements, state whether
applicable UK accounting standards have been followed, subject
to any material departures disclosed and explained in the
parent Company financial statements;
• assess the Group and parent Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to
going concern; and
• use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to
cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the parent Company and
enable them to ensure that its financial statements comply with
the Companies Act 2006. They are responsible for such internal
control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and other
irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The directors are responsible for the maintenance and integrity of
the corporate and financial information included on the company’s
website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule
4.1.14R, the financial statements will form part of the annual
financial report prepared using the single electronic reporting
format under the TD ESEF Regulation. The auditor’s report on these
financial statements provides no assurance over the ESEF format.
Responsibility statement of the directors in
respect of the annual financial report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the company and the undertakings included in the
consolidation taken as a whole; and
• the strategic report includes a fair review of the development
and performance of the business and the position of the issuer
and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and
uncertainties that they face.
We consider the annual report and accounts, taken as a whole, is
fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position and
performance, business model and strategy.
Independent auditor
The Company is proposing to undertake an audit tender exercise,
the result of which will not be known until after the 2022 AGM has
been held. In the interim period, KPMG LLP (‘KPMG’) have indicated
their willingness to continue to act as the Company’s auditor until the
outcome of the tender has been concluded. Upon recommendation
of the Audit Committee, the reappointment of KPMG and the
setting of their remuneration will be proposed at the 2022 AGM.
Auditor and the disclosure of
information to the auditor
The Companies Act requires directors to provide the Company’s
auditor with every opportunity to take whatever steps and
undertake whatever inspections they consider to be appropriate
for the purpose of enabling them to give their audit report. The
directors, having made appropriate enquiries, confirm that:
• so far as the director is aware, there is no relevant audit
information of which the Company’s auditor are unaware; and
• he/she has taken all the steps that he/she ought to have taken
as a director in order to make himself/herself aware of any
relevant audit information and to establish that the Company’s
auditor are aware of that information.
The directors’ report was approved by the Board on 18 May 2022
and signed on its behalf by:
Simon Rose
General Counsel and Company Secretary
companysecretary@premierfoods.co.uk
Premier Foods plc
www.premierfoods.co.uk
 99
GOVERNANCE
Sharwood’s 30% less
sugar stir fry sauce
89% of our core ranges now
include at least one better-for-you
product, including Sharwood’s
30% less sugar stir fry sauce
pouches.
Independent auditor’s report
to the members of
Premier Foods plc 101
Consolidated financial
statements 111
Notes to the consolidated
financial statements 115
Company financial statements 157
Notes to the company
financial statements 159
Additional disclosures 163
Financial
statements
 100
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
Independent auditor’s report
to the members of Premier Foods plc
1 Our opinion is unmodified
We have audited the financial statements of Premier Foods plc
(“the Company”) for the 52 week period ended 2 April 2022 which
comprise the consolidated statement of profit or loss, consolidated
statement of comprehensive income, consolidated balance sheet,
consolidated statement of cash flows, consolidated statement of
changes in equity, Company balance sheet, Company statement of
changes in equity and the related notes, including the accounting
policies in note 2 to the Group financial statements and note 1 to
the Company financial statements
In our opinion:
• the financial statements give a true and fair view of the state
of the Group’s and of the parent Company’s affairs as at 2 April
2022 and of the Group’s profit for the period then ended;
• the Group financial statements have been properly prepared
in accordance with UK-adopted international accounting
standards;
• the parent Company financial statements have been properly
prepared in accordance with UK accounting standards, including
FRS 101 Reduced Disclosure Framework; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities are described below. We believe that the audit
evidence we have obtained is a sufficient and appropriate basis for
our opinion. Our audit opinion is consistent with our report to the
audit committee.
We were first appointed as auditor by the directors on 4 September
2015. The period of total uninterrupted engagement is for the 7
financial periods ended 2 April 2022. We have fulfilled our ethical
responsibilities under, and we remain independent of the Group in
accordance with, UK ethical requirements including the FRC Ethical
Standard as applied to listed public interest entities. No non-audit
services prohibited by that standard were provided.
Overview
Materiality: Group financial
statements
as a whole
£4.5m (2020/2021: £4.5m)
0.5% (2020/2021: 0.48%)
of revenue
Coverage 97% (2020/2021: 96%)
of revenue
Key audit matters (recurring) vs 2020/2021
Valuation of pension scheme assets for which a quoted price is
not available

Valuation of defined benefit pension obligation

Revenue recognition subject to commercial arrangements

Recoverability of parent company’s investment in subsidiaries

Premier Foods plc
www.premierfoods.co.uk
 101
FINANCIAL STATEMENTS
Independent auditor’s report CONTINUED
to the members of Premier Foods plc
2 Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team.
We summarise below the key audit matters (unchanged from 2021/2022), in decreasing order of audit significance, in arriving at our audit
opinion above, together with our key audit procedures to address those matters and, as required for public interest entities, our results
from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of, and solely
for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to
that opinion, and we do not provide a separate opinion on these matters.
The risk Response
Valuation of pension
scheme assets for
which a quoted price
is not available
Refer to page 78
(Audit Committee
Report), page 120 and
122 (accounting policy)
and page 135-141
(financial disclosures).
Subjective valuation
The Group’s RHM Pension Scheme holds material
assets for which quoted prices are not available.
The valuation of these assets can have a
significant impact on the surplus in the scheme.
Valuations are prepared based on the most
recent information available and are adjusted
where appropriate.
There is increased estimation uncertainty
associated with the valuation of these assets as
the valuations may precede the year-end, and
significant judgement is required to evaluate
market indices used by directors to estimate the
adjustments needed to these asset valuations.
As a result, we determined that the valuation
of these assets is subject to a high degree of
estimation uncertainty, with a potential range
of reasonable outcomes greater than our
materiality for the financial statements as a
whole and possibly many times that amount.
Our procedures included:
• Assessing credentials of external fund managers and
custodians: we assessed the competence and objectivity
of the fund managers and custodians who prepared
asset statements to support the Group’s valuation of
scheme assets;
• Assessing historical estimates: we compared the
Group’s fund managers’ historical estimated net asset
values to the latest audited financial statements of those
funds to assess the Group’s ability to accurately estimate
the fair value of assets;
• Asset confirmations: we compared the asset values
recognised by the Group to confirmations obtained
directly from fund managers and custodians.
• Benchmarking assumptions: we performed an
independent assessment of the movement in market
indices used by directors to estimate if adjustments
were required to be made to asset valuations that had a
valuation date preceding the year-end;
• Assessing transparency : we considered the adequacy
of the Group’s disclosures relating to the valuation of
scheme assets for which a quoted price is not available.
We performed the tests above rather than seeking to
rely on any of the Group’s controls because the nature
of the balance is such that we would expect to obtain
audit evidence primarily through the detailed procedures
described above.
Our results
The results of our testing were satisfactory, and we found
the valuation of scheme assets for which a quoted price is
not available to be acceptable (2020/2021: acceptable).
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 102
The risk Response
Valuation of defined
benefit pension
obligation
Defined benefit
pension obligation
£4,155.1m;
(2020/2021: £4,712m)
Refer to page 78 (Audit
Committee Report),
page 120 and 122
(accounting policy)
and page 135-141
(financial disclosures).
Subjective valuation
Small changes in the assumptions used to value
the liabilities of the RHM Pension Scheme,
Premier Foods Pensions Scheme and Premier
Grocery Products Pension Scheme, in particular
those relating to inflation, mortality, and discount
rates, can have a significant impact on the
valuation of the liabilities.
The effect of these matters is that we determined
that the pension assumptions have a high degree
of estimation uncertainty, with a potential
range of reasonable outcomes greater than our
materiality for the financial statements as a
whole, and possibly many times that amount.
The financial statements (note 13 (b)) disclose
the sensitivities estimated by the Group in
respect of these assumptions
Our procedures included:
• Assessing external actuary’s credentials: we critically
assessed the qualifications, objectivity and competence
of the Group’s external actuaries to determine if they
have the knowledge and experience required to perform
the valuation of the defined benefit pension schemes
• Our actuarial expertise: using our own actuarial
specialists, we evaluated and challenged the
assumptions on mortality rates, forecast future inflation
rates, and discount rates applied to estimate the present
value of the future obligations of the defined benefit
pension schemes
• Benchmarking assumptions: we benchmarked the
assumptions applied in the valuation of the defined
benefit pension obligations against market data
and peers.
• Assessing transparency: we considered the adequacy of
the Group’s disclosures relating to the sensitivity of the
obligation to these assumptions.
We performed the tests above rather than seeking to
rely on any of the Group’s controls because the nature
of the balance is such that we would expect to obtain
audit evidence primarily through the detailed procedures
described above.
Our results
The results of our testing were satisfactory, and we found
the valuation of defined benefit obligation to be acceptable
(2020/2021: acceptable).
Premier Foods plc
www.premierfoods.co.uk
 103
FINANCIAL STATEMENTS
Independent auditor’s report CONTINUED
to the members of Premier Foods plc
The risk Response
Revenue recognition
subject to commercial
arrangements
Commercial accruals
£75.1m; (2020/2021:
£75.5m)
Refer to page 77 (Audit
Committee Report),
page 116, 117 and 123
(accounting policy) and
page 144 (financial
disclosures).
Subjective estimate
The Group regularly enters into commercial
arrangements with its customers to offer
product promotions and discounts. Revenue is
measured net of outflows in relation to these
arrangements.
Due to the variability in the nature and the
number of different arrangements in place,
there is a risk that these arrangements are not
appropriately accounted for and as a result
revenue is misstated.
Certain arrangements are subject to a higher
degree of estimation as they span the year-
end and require the directors to estimate the
liability related to in year promotional activity
which remains unsettled at year-end. The
most significant source of uncertainty arises
from estimating the sales volumes attributable
to each arrangement, or estimating the final
expected settlement, which could vary based on
subsequent commercial negotiations.
There is also a risk that revenue may be
overstated through fraudulent manipulation of
the commercial accruals recognised resulting
from the pressure management may feel to
achieve performance targets.
Our procedures included:
Accounting policies: we critically assessed the
appropriateness of the Group’s accounting policies
relating to commercial arrangements against the relevant
accounting standards.
Historical comparisons: We evaluated the accuracy of
the Group’s more judgemental commercial accruals by
comparing those recognised in the prior year to the actual
settlements agreed with the customer.
Test of detail:
We focused our detailed testing on commercial accruals we
considered to be more judgemental or potentially subject
to management bias and fraud. For a sample of these
commercial accruals we:
• Recalculated selected accruals based on the terms of the
arrangement, including relevant incentive or promotion
rates and sales subject to the commercial arrangement
in order to assess the accuracy of the accrual;
• Identified the key inputs and assumptions in
the calculation of each accrual selected, such as
promotional discount structure and actual or forecasted
sales volumes;
• Agreed those key inputs and assumptions to relevant
documentation, such as invoices received after the
balance sheet date, customer agreements or third-party
consumption data; and
• Assessed whether the key assumptions were consistent
with external and internal data points and the Group’s
historical experience for these promotions.
In addition to the procedures above we:
• Visited a selection of customer stores before the period
end, identifying product promotions and assessing
whether those promotions were appropriately accrued
for at year-end;
• Inspected a selection of accruals recorded after the
year end and assessed whether the accrual was
recorded in the correct accounting period to assess the
completeness of accruals recorded at year-end; and
• Obtained supporting documentation for manual journals
recorded to revenue through commercial accruals to
assess the appropriateness of the journals.
Assessing transparency: Considered the adequacy of the
Group’s disclosures relating to the significant accounting
policies, estimates and judgments in respect of volume
rebates and discounts.
We performed the tests above rather than seeking to
rely on any of the Group’s controls because the nature
of the balance is such that we would expect to obtain
audit evidence primarily through the detailed procedures
described above.
Our results:
The results of our testing were satisfactory, and we found
revenue relating to commercial arrangements to be
acceptable (2020/2021: acceptable).
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 104
The risk Response
Recoverability of
parent company’s
investment in
subsidiaries
£1,114.8m; (2020/21:
£1,112.5m)
Refer to page 159
(accounting policy) and
page 160-161 (financial
disclosures).
Forecast-based valuation:
The carrying value of the parent company’s
investment in its subsidiary represents 97%
(2019/2020: 97%) of the Company’s total assets.
The carrying amounts of the company’s
investment is significant and at risk of
irrecoverability as it is dependent on the Group’s
ability to achieve increases in profitability in line
with its strategic plans.
The estimated recoverable amount of this
investment is subjective due to the inherent
uncertainty involved in forecasting and
discounting these future cash flows.
The effect of these matters is that, as part of
our risk assessment, we determined that the
recoverable amount of the cost of investment
in subsidiaries has a high degree of estimation
uncertainty, with a potential range of reasonable
outcomes greater than our materiality for the
financial statements as a whole.
Our procedures included:
• Benchmarking assumptions: we challenged, with the
assistance of our valuation specialists, the assumptions
used in the valuation model, in particular those relating
to i) revenue and profit, ii) long term growth rates; and
iii) the discount rates used, by comparing these with
externally derived data and our understanding of the
Group and sector performance;
• Sensitivity analysis: we performed sensitivities on the
key assumptions noted above;
• Historical comparisons: we assessed the reasonableness
of the forecasts by considering the historical accuracy of
the previous forecasts; and
• Assessing transparency: we assessed the adequacy
of the parent company’s disclosures in respect of the
investment in subsidiaries
We performed the tests above rather than seeking to
rely on any of the Group’s controls because the nature
of the balance is such that we would expect to obtain
audit evidence primarily through the detailed procedures
described above
Our results:
We found the company’s conclusion that there is no
impairment of its investments in subsidiaries to be
acceptable (2020/2021: acceptable).
Premier Foods plc
www.premierfoods.co.uk
 105
FINANCIAL STATEMENTS
Independent auditor’s report CONTINUED
to the members of Premier Foods plc
3 Our application of materiality and an overview of
the scope of our audit
Materiality
The materiality of the Group financial statements as a whole was
set at £4.5m (2020/2021: £4.5m), determined with reference to a
benchmark of revenue of £900.5m (2020/2021: £947m) of which it
represents 0.5% (2020/2021: 0.48%).
We used a benchmark of revenue which we consider to be
appropriate as it is a key measure of the performance of the Group
and appropriately reflects the size of the business. We have also
given consideration to profit metrics such as trading profit and
normalised profit before tax and our materiality is reasonable by
reference to those metrics.
Materiality for the parent Company financial statements as a whole
was set at £1.2m (2020/2021: £1.2m), determined with reference
to a benchmark of company total assets, of which it represents
0.1% (2020/2021: 0.1%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an
acceptable level the risk that individually immaterial misstatements
in individual account balances add up to a material amount across
the financial statements as a whole.
Performance materiality for the Group and the parent company
was set at 75% (2020/2021: 75%) of materiality for the financial
statements, which equates to £3.3m (2020/2021: £3.3m) for the
Group and £0.9m (2020/2021: £0.9m) for the parent company.
We applied this percentage in our determination of performance
materiality because we did not identify any factors indicating an
elevated level of risk.
We agreed to report to the Audit Committee any corrected
or uncorrected identified misstatements exceeding £0.22m
(2020/2021: £0.22m), in addition to other identified misstatements
that warranted reporting on qualitative grounds
Scoping
Of the Group’s 32 (2020/2021: 33) reporting components, we
subjected 2 components (2020/2021: 3) to full scope audits for
group purposes and 2 components (2020/2021: 2) to specific risk
focused audit procedures focussed over borrowings and cash.
The latter were not individually financially significant enough
to require a full scope audit for group purposes but did present
specific individual risks that needed to be addressed.
The components within the scope of our work accounted for the
percentages illustrated opposite.
The remaining 3% (2020/2021: 4%) of total revenue, 1%
(2020/2021: 1%) of profit before tax and 2% (2020/2021: 2%) of
total assets is represented by 28 (2020/2021: 28) of reporting
components, none of which individually represented more than
2% (2020/2021: 2%) of any of total revenue, profit before tax or
total assets. For these components, we performed analysis at an
aggregated group level to re-examine our assessment that there
were no significant risks of material misstatement within these.
The component materialities ranged from £1.2m to £4.2m
(2020/2021: £1.2m to £4.2m), having regard to the mix of size and
risk profile of the Group across the components.
All full scope and audit of account balance components are
managed from the central locations in the UK and the work on
all components, including the audit of the parent company, was
performed by the Group team.
The scope of the audit work performed was predominately
substantive as we placed limited reliance upon the Group’s internal
control over financial reporting.
98%
(2020/2021: 98%)
3
4
95
94
99%
(2020/2021: 99%)
9
13
90
86
Full scope for Group audit purposes 2021/2022
Audit of specific account balances 2021/2022
Full scope for Group audit purposes 2020/2021
Audit of specific account balances 2020/2021
Residual components
97%
(2020/2021: 96%)
97
96
Total assets Total profits and losses that
made up profit before tax
Revenue
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 106
4 The impact of climate change on our audit
In planning our audit, we considered the potential impacts
of climate change on the Group’s business and its financial
statements.
The Group has set out in the Strategic Report its commitment to
achieving net zero Scope 1 and Scope 2 greenhouse gas emissions
(GHGs) by 2040 and Scope 3 GHGs by 2050 and its commitment to
several other shorter-term targets.
As a part of our audit, we have performed a risk assessment,
including enquiries of management, to understand how the impact
of commitments made by the Group in respect of climate change,
as well as the physical or transition risks of climate change, may
affect the financial statements and our audit. There was no impact
of this work on our key audit matters.
Whilst the Group is still undertaking work to quantify and assess
the potential impact of climate change on the business, based on
the procedures we performed in reviewing and challenging the
Group’s road map for transitioning to net zero Scope 1 and Scope
2 GHGs, we did not identify any significant risk in this period of
climate change having a material impact on the Group’s critical
accounting estimates. This is due to the shorter-term nature of
certain estimates (commercial accruals in respect of revenue) and
the level of headroom (impairment of goodwill and intangible
assets). In addition, we did not identify any significant risks in this
period to the carrying value and useful economic lives of property,
plant and equipment caused by the projected physical risks of
climate change or the transition to a net zero operating model.
We have read the disclosures of climate related information in the
annual report and considered their consistency with the financial
statements and our audit knowledge. We have not been engaged to
provide assurance over the accuracy of the climate risk disclosures
in the Annual Report.
5 Going concern
The Directors have prepared the financial statements on the going
concern basis as they do not intend to liquidate the Group or the
Company or to cease their operations, and as they have concluded
that the Group’s and the Company’s financial position means that
this is realistic. They have also concluded that there are no material
uncertainties that could have cast significant doubt over their ability
to continue as a going concern for at least a year from the date of
approval of the financial statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the general
economic environment to identify the inherent risks to its business
model and analysed how those risks might affect the Group’s and
Company’s financial resources or ability to continue operations over
the going concern period.
The risks that we considered most likely to adversely affect the
Group’s and Company’s available financial resources and metrics
relevant to debt covenants over this period were the temporary
loss of production capability due to Covid-19 outbreaks in the
manufacturing facilities or related labour shortages as well as
failure to adequately mitigate input cost inflation.
We also considered less predictable but realistic second order
impacts, such as impact of climate change on the demand for
certain Group’s products, as well as a large scale cyber breach
leading to service interruption, which could result in a rapid
reduction of available financial resources.
We considered whether these risks could plausibly affect the
liquidity or debt covenant compliance in the going concern period
by comparing severe, but plausible downside scenarios that could
arise from these risks individually and collectively against the level
of available financial resources and covenants indicated by the
Group’s financial forecasts.
Our procedures also included:
• Critically assessing assumptions in the Directors’ base and
downside scenarios, particularly in relation to forecasted
revenues and costs including the impact of input cost inflation
and other factors described above, and their impact on
forecast liquidity and covenant compliance, by reference to our
understanding of the entity’s plans based on approved budgets,
as well as our knowledge of the entity and the sector in which it
operates; and
• Considering whether the going concern disclosure in note 1.1
to the financial statements gives a full and accurate description
of the Directors’ assessment of going concern, including the
identified risks, and related sensitivities.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis
of accounting in the preparation of the financial statements is
appropriate;
• we have not identified, and concur with the directors’
assessment that there is not, a material uncertainty related
to events or conditions that, individually or collectively, may
cast significant doubt on the Group’s or Company’s ability to
continue as a going concern for the going concern period;
• we have nothing material to add or draw attention to in
relation to the directors’ statement in note 1.1 to the financial
statements on the use of the going concern basis of accounting
with no material uncertainties that may cast significant doubt
over the Group and Company’s use of that basis for the going
concern period, and we found the going concern disclosure in
note 1.1 to be acceptable; and
• the related statement under the Listing Rules set out on page
98 is materially consistent with the financial statements and our
audit knowledge.
However, as we cannot predict all future events or conditions and
as subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were made,
the above conclusions are not a guarantee that the Group or the
Company will continue in operation.
Premier Foods plc
www.premierfoods.co.uk
 107
FINANCIAL STATEMENTS
Independent auditor’s report CONTINUED
to the members of Premier Foods plc
6 Fraud and breaches of laws and regulations – ability
to detect
Identifying and responding to risks of material
misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud
risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to
commit fraud. Our risk assessment procedures included:
• Enquiring of the Directors, Audit Committee, internal audit,
legal counsel and inspection of policy documentation as to
the Group’s high-level policies and procedures to prevent and
detect fraud and the Group’s channel for “whistleblowing”, as
well as whether they have knowledge of any actual, suspected
or alleged fraud;
• Reading Board and all relevant committee meeting minutes;
• Considering remuneration incentive schemes and performance
targets for management and directors, including the including
the annual performance bonus and LTIP for the executive
directors, which is dependent on a number of key metrics,
some of which are non-GAAP measures such as trading profit
and adjusted EPS; and
• Using analytical procedures to identify any unusual or
unexpected relationships.
We communicated identified fraud risks throughout the audit team
and remained alert to any indications of fraud throughout the audit.
As required by auditing standards, and taking into account
the nature of certain commercial arrangements, we perform
procedures to address the risk of management override of
controls and the risk of fraudulent revenue recognition relating
to estimates and judgements management apply in estimating
commercial accruals outstanding at period end, as well as the risk
that management may be in a position to make inappropriate
accounting entries.
Further detail in respect of revenue commercial arrangements is set
out in the key audit matter disclosures in section 2 of this report
We did not identify any additional fraud risks.
We also performed procedures including:
• Identifying journal entries and other adjustments to test for all
full scope components based on risk criteria and comparing the
identified entries to supporting documentation. These included
those posted by senior finance management, those posted
to unusual accounts, manual journals posted to revenue, and
those with missing user identification; and
• Assessing significant accounting estimates for bias
Identifying and responding to risks of material
misstatement due to non-compliance with laws and
regulations
We identified areas of laws and regulations that could reasonably
be expected to have a material effect on the financial statements
from our general commercial and sector experience, through
discussion with the Directors and other management (as
required by auditing standards), and from inspection of the
Group’s legal correspondence and discussed with the Directors
and other management the policies and procedures regarding
compliance with laws and regulations. As the Group is regulated,
our assessment of risks involved gaining an understanding of
the control environment including the entity’s procedures for
complying with regulatory requirements.
We communicated identified laws and regulations throughout our
team and remained alert to any indications of non-compliance
throughout the audit.
The potential effect of these laws and regulations on the financial
statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly
affect the financial statements including financial reporting
legislation (including related companies legislation), distributable
profits legislation, and taxation legislation and we assessed the
extent of compliance with these laws and regulations as part of our
procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations
where the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for
instance through the imposition of fines or litigation or the loss of
the Group’s license to operate.
We identified the following areas as those most likely to have such
an effect:
• Employee health and safety and other employments legislation;
• Product safety regulations;
• Labelling and environmental regulations; and
• Intellectual property legislation, reflection the potential of the
Group to infringe trademarks, copyright and patents.
Auditing standards limit the required audit procedures to identify
non-compliance with these laws and regulations to enquiry of the
directors and other management and inspection of regulatory and
legal correspondence, if any. Therefore, if a breach of operational
regulations is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 108
Context of the ability of the audit to detect fraud or
breaches of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-
compliance with laws and regulations is from the events and
transactions reflected in the financial statements, the less likely the
inherently limited procedures required by auditing standards would
identify it.
In addition, as with any audit, there remained a higher risk of
non-detection of fraud, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing
non-compliance or fraud and cannot be expected to detect non-
compliance with all laws and regulations.
7 We have nothing to report on the other information
in the Annual Report
The directors are responsible for the other information presented
in the Annual Report together with the financial statements. Our
opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or,
except as explicitly stated below, any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our financial statements audit work,
the information therein is materially misstated or inconsistent with
the financial statements or our audit knowledge. Based solely on
that work we have not identified material misstatements in the
other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the strategic
report and the directors’ report;
• in our opinion the information given in those reports for the
financial year is consistent with the financial statements; and
• in our opinion those reports have been prepared in accordance
with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks and longer-term
viability
We are required to perform procedures to identify whether there
is a material inconsistency between the directors’ disclosures in
respect of emerging and principal risks and the viability statement,
and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or
draw attention to in relation to:
• the directors’ confirmation within the viability statement on
page 58 is that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those
that would threaten its business model, future performance,
solvency and liquidity;
• the Principal Risks disclosures describing these risks and how
emerging risks are identified, and explaining how they are being
managed and mitigated; and
• the directors’ explanation in the Viability statement of how
they have assessed the prospects of the Group, over what
period they have done so and why they considered that period
to be appropriate, and their statement as to whether they
have a reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related
disclosures drawing attention to any necessary qualifications or
assumptions.
We are also required to review the Viability statement set out on
page 58 under the Listing Rules. Based on the above procedures,
we have concluded that the above disclosures are materially
consistent with the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of
only the knowledge acquired during our financial statements
audit. As we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were made,
the absence of anything to report on these statements is not a
guarantee as to the Group’s and Company’s longer-term viability.
Premier Foods plc
www.premierfoods.co.uk
 109
FINANCIAL STATEMENTS
Corporate governance disclosures
We are required to perform procedures to identify whether there
is a material inconsistency between the directors’ corporate
governance disclosures and the financial statements and our audit
knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the financial statements and
our audit knowledge:
• the directors’ statement that they consider that the annual
report and financial statements taken as a whole is fair,
balanced and understandable, and provides the information
necessary for shareholders to assess the Group’s position and
performance, business model and strategy;
• the section of the annual report describing the work of the
Audit Committee, including the significant issues that the audit
committee considered in relation to the financial statements,
and how these issues were addressed; and
• the section of the annual report that describes the review of
the effectiveness of the Group’s risk management and internal
control systems.
We are required to review the part of the Corporate Governance
Statement relating to the Group’s compliance with the provisions
of the UK Corporate Governance Code specified by the Listing Rules
for our review. We have nothing to report in this respect
8 We have nothing to report on the other matters on
which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if,
in our opinion:
• adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent Company financial statements and the part of
the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law
are not made; or
• we have not received all the information and explanations we
require for our audit.
We have nothing to report in these respects.
9 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 99,
the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and
fair view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; assessing
the Group and parent Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern;
and using the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor’s report. Reasonable assurance is a high level
of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
The Company is required to include these financial statements
in an annual financial report prepared using the single electronic
reporting format specified in the TD ESEF Regulation. This auditor’s
report provides no assurance over whether the annual financial
report has been prepared in accordance with that format.
A fuller description of our responsibilities is provided on the FRC’s
website at www.frc.org.uk/auditorsresponsibilities.
10 The purpose of our audit work and to whom we
owe our responsibilities
This report is made solely to the Company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006
and the terms of our engagement by the Company. Our audit work
has been undertaken so that we might state to the Company’s
members those matters we are required to state to them in an
auditor’s report and the further matters we are required to state
to them in accordance with the terms agreed with the Company,
and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than
the Company and the Company’s members, as a body, for our audit
work, for this report, or for the opinions we have formed.
Zulfikar Walji (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London E14 5GL
18 May 2022
Independent auditor’s report CONTINUED
to the members of Premier Foods plc
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
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Consolidated statement of profit or loss
Note
52 weeks
ended
2 April 2022
£m
53 weeks
ended
3 April 2021
£m
Revenue 4 900.5 947.0
Cost of sales (573.4) (611.7)
Gross profit 327.1 335.3
Selling, marketing and distribution costs (133.4) (137.4)
Administrative costs (62.6) (77.9)
Reversal of impairment losses on financial assets – 15.7
Profit on disposal of investment in associate – 16.9
Operating profit 4, 5 131.1 152.6
Finance cost 7 (29.0) (36.2)
Finance income 7 0.5 6.4
Profit before taxation 102.6 122.8
Taxation charge 8 (25.1) (16.8)
Profit for the period attributable to owners of the parent 77.5 106.0
Basic earnings per share
From profit for the period (pence) 9 9.0 12.5
Diluted earnings per share
From profit for the period (pence) 9 8.8 12.2
Consolidated statement of
comprehensive income
Note
52 weeks
ended
2 April 2022
£m
53 weeks
ended
3 April 2021
£m
Profit for the period 77.5 106.0
Other comprehensive income, net of tax
Items that will never be reclassified to profit or loss
Remeasurements of defined benefit schemes 13 357.3 (750.3)
Deferred tax (charge) / credit 8 (114.2) 132.9
Current tax credit 8 6.4 9.2
Items that are or may be reclassified subsequently to profit or loss
Exchange differences on translation (0.4) (1.0)
Other comprehensive income, net of tax 249.1 (609.2)
Total comprehensive income attributable to owners of the parent 326.6 (503.2)
The notes on pages 115 to 156 form an integral part of the consolidated financial statements.
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FINANCIAL STATEMENTS
Consolidated balance sheet
Note
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
ASSETS:
Non-current assets
Property, plant and equipment 10 190.9 192.1
Goodwill 11 646.0 646.0
Other intangible assets 12 293.5 317.2
Deferred tax assets 8 23.1 28.4
Net retirement benefit assets 13 1,148.7 934.7
2,302.2 2,118.4
Current assets
Stocks 14 78.1 68.8
Trade and other receivables 15 96.5 83.4
Cash and cash equivalents 16 54.3 4.2
Derivative financial instruments 18 2.4 0.1
231.3 156.5
Total assets 2,533.5 2,274.9
LIABILITIES:
Current liabilities
Trade and other payables 17 (254.0) (249.8)
Financial liabilities
– short-term borrowings 19 – (3.1)
– derivative financial instruments 18 (0.3) (2.3)
Lease liabilities 19 (2.1) (2.3)
Provisions for liabilities and charges 20 (2.3) (6.2)
(258.7) (263.7)
Non-current liabilities
Long-term borrowings 19 (323.2) (315.2)
Lease liabilities 19 (14.0) (16.3)
Net retirement benefit obligations 13 (203.8) (394.8)
Provisions for liabilities and charges 20 (8.3) (8.4)
Deferred tax liabilities 8 (212.9) (85.8)
Other liabilities 21 (5.7) (7.1)
(767.9) (827.6)
Total liabilities (1,026.6) (1,091.3)
Net assets 1,506.9 1,183.6
EQUITY:
Capital and reserves
Share capital 22 86.3 85.5
Share premium 22 1.5 0.6
Merger reserve 22 351.7 351.7
Other reserves 22 (9.3) (9.3)
Profit and loss reserve 22 1,076.7 755.1
Total equity 1,506.9 1,183.6
The notes on pages 115 to 156 form an integral part of the consolidated financial statements.
The financial statements on pages 111 to 156 were approved by the Board of directors on 18 May 2022 and signed on its behalf by:
ALEX WHITEHOUSE DUNCAN LEGGETT
Chief Executive Officer Chief Financial Officer
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Annual Report for the 52 weeks ended 2 April 2022
 112
Consolidated statement of cash flows
Note
52 weeks
ended
2 April 2022
£m
53 weeks
ended
3 Apr 2021
£m
Cash generated from operations 16 110.9 118.2
Interest paid (21.2) (34.1)
Interest received 0.4 1.5
Cash generated from operating activities 90.1 85.6
Proceeds from repayment of loan notes to associate – 15.7
Net proceeds from sale of investment in associate – 16.9
Interest received on loan notes to associate – 4.7
Purchases of property, plant and equipment (19.5) (18.0)
Purchases of intangible assets (3.7) (5.6)
Sale of property, plant and equipment – 0.1
Cash (used in) / generated from investing activities (23.2) 13.8
Repayment of borrowings (320.0) (275.0)
Proceeds from borrowings 330.0 –
Repayment of lease liabilities (3.3) (2.7)
Financing fees
1
(8.5) –
Early redemption fee
1
(4.7) –
Dividends paid 23 (8.5) –
Purchase of shares to satisfy share awards (0.4) (0.2)
Proceeds from share issue 1.7 1.7
Cash used in financing activities (13.7) (276.2)
Net increase / (decrease) in cash and cash equivalents 53.2 (176.8)
Cash, cash equivalents and bank overdrafts at beginning of period 1.1 177.9
Cash and cash equivalents at end of period
2
16 54.3 1.1
1
Relates to payments made as part of the refinancing of the Group’s debt in June 2021. See note 19 for further details.
2
Cash and cash equivalents of £54.3m (2020/21: £1.1m) includes bank overdraft of £nil (2020/21: £3.1m) and cash and bank deposits of £54.3m (2020/21: £4.2m). See notes 16
and 18 for more details.
The notes on pages 115 to 156 form an integral part of the consolidated financial statements.
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FINANCIAL STATEMENTS
Consolidated statement of changes in equity
Note
Share
capital
£m
Share
premium
£m
Merger
reserve
£m
Other
reserves
£m
Profit and
loss reserve
1
£m
Total
equity
£m
At 29 March 2020 84.8 1,409.4 351.7 (9.3) (156.6) 1,680.0
Profit for the period – – – – 106.0 106.0
Remeasurements of defined benefit
schemes 13 – – – – (750.3) (750.3)
Deferred tax credit 8 – – – – 132.9 132.9
Current tax credit 8 – – – – 9.2 9.2
Exchange differences on translation – – – – (1.0) (1.0)
Other comprehensive income – – – – (609.2) (609.2)
Total comprehensive income – – – – (503.2) (503.2)
Shares issued 22 0.7 1.0 – – – 1.7
Capital reduction
2
– (1,409.8) – – 1,409.8 –
Share-based payments 22 – – – – 3.1 3.1
Purchase of shares to satisfy share
awards 22 – – – – (0.2) (0.2)
Deferred tax movements on share-
based payments 8 – – – – 2.2 2.2
At 3 April 2021 85.5 0.6 351.7 (9.3) 755.1 1,183.6
At 4 April 2021 85.5 0.6 351.7 (9.3) 755.1 1,183.6
Profit for the period – – – – 77.5 77.5
Remeasurements of defined benefit
schemes 13 – – – – 357.3 357.3
Deferred tax charge 8 – – – – (114.2) (114.2)
Current tax credit 8 – – – – 6.4 6.4
Exchange differences on translation – – – – (0.4) (0.4)
Other comprehensive income – – – – 249.1 249.1
Total comprehensive income – – – – 326.6 326.6
Shares issued 22 0.8 0.9 – – – 1.7
Share-based payments 22 – – – – 3.4 3.4
Purchase of shares to satisfy share
awards 22 – – – – (0.4) (0.4)
Deferred tax movements on share-
based payments 8 – – – – 0.5 0.5
Dividends 23 – – – – (8.5) (8.5)
At 2 April 2022 86.3 1.5 351.7 (9.3) 1,076.7 1,506.9
1
Included in Profit and loss reserve at 2 April 2022 is £3.7m in relation to cumulative translation losses (2019/20: £2.3m loss, 2020/21: £3.3m loss)
2
Following shareholder approval at a General Meeting held on 11 January 2021 and a hearing in the High Court of Justice, Business and Property Courts of England and Wales
on 9 February 2021, an order was given confirming the cancellation of the entire amount standing to the credit of the Company’s share premium account, which amounted to
£1,409.8m (‘Capital Reduction’). The order was produced to the Registrar of Companies and was registered on 10 February 2021, making the Reduction of Capital effective.
The notes on pages 115 to 156 form an integral part of the consolidated financial statements.
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Annual Report for the 52 weeks ended 2 April 2022
 114
Notes to the financials statements
1. General information
Premier Foods plc (the ‘Company’) is a public limited company incorporated and domiciled in England and Wales, registered number
5160050, with its registered address at Premier House, Centrium Business Park, Griffiths Way, St Albans, Hertfordshire AL1 2RE. The
principal activity of the Company and its subsidiaries (the ‘Group’) is the manufacture and distribution of branded and own label food
products. Copies of the annual report and accounts are available on our website: http://www.premierfoods.co.uk/investors/results-centre.
These Group consolidated financial statements were authorised for issue by the Board of directors on 18 May 2022.
1.1 Basis of preparation
These Group financial statements were prepared in accordance with UK-adopted international accounting standards. All amounts are
presented to the nearest £0.1m, unless otherwise indicated.
The statutory accounting period is the 52 weeks from 4 April 2021 to 2 April 2022 and comparative results are for the 53 weeks from
29 March 2020 to 3 April 2021. All references to the ‘period’, unless otherwise stated, are for the 52 weeks ended 2 April 2022 and the
comparative period, 53 weeks ended 3 April 2021.
The preparation of financial statements in conformity with UK-adopted IFRS requires the use of certain significant accounting estimates. It
also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are
disclosed in note 3.
The following accounting standards and interpretations, issued by the International Accounting Standards Board (‘IASB’), effective for
periods on or after 1 January 2021, have been endorsed:
International Financial Reporting Standards
Amendments to IFRS 4 Insurance Contracts
Amendments to IFRS 9, IAS 39 and IFRS 7, IFRS 4, and IFRS 16 Interest Rate Benchmark Reform
The following accounting standards and interpretations, issued by the International Accounting Standards Board (‘IASB’), effective for
periods on or after 1 April 2021, have been endorsed:
International Financial Reporting Standards
Amendments to IFRS 16 leases Covid 19-Related Rent Concessions
The following standards and amendments to published standards, effective for periods on or after 1 January 2022, have been endorsed:
International Financial Reporting Standards
Amendments to IFRS 3 Business Combinations
Amendments to IAS 16 Property, Plant and Equipment
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets
The Group has considered the new or revised standards above and concluded that either they are not relevant to the Group or would not
have a material impact on the financial statements of the Group.
The following standards and amendments to published standards, effective for periods on or after 1 January 2022, have not been endorsed:
International Financial Reporting Standards
Amendments to IAS 1 Presentation of Financial Statements
Amendments to IAS 8 Accounting policies, Changes in Accounting
Estimates and Errors
Amendments to IAS 12 Income Taxes
Amendments to IFRS 17 Insurance Contracts
Basis for preparation of financial statements on a going concern basis
The Group’s revolving credit facility includes net debt/EBITDA and EBITDA/interest covenants as detailed in note 19. In the event these
covenants are not met then the Group would be in breach of its financing agreement and, as would be the case in any covenant breach,
the banking syndicate could withdraw funding to the Group. The Group was compliant with its covenant tests as at 2 October 2021 and 2
April 2022.
Having undertaken a robust assessment of the Group’s forecasts with specific consideration to the trading performance of the Group,
cashflows and covenant compliance, the Directors have a reasonable expectation that the Group is able to operate within the level of its
current facilities, meet the required covenant tests and has adequate resources to continue in operational existence for at least 12 months
from the date of approval of these financial statements. The Group therefore continues to adopt the going concern basis in preparing its
financial information for the reasons set out below.
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 115
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
At 2 April 2022 the Group had total assets less current liabilities of £2,274.8m and net assets of £1,506.9m. Liquidity as at that date was
£229.3m made up of cash and cash equivalents, and undrawn committed credit facilities of £175m expiring in May 2025. The covenants
linked to the facilities are shown in note 19 of the financial statements. At the time of the approval of this report, the cash and liquidity
position of the group has not changed significantly.
The Group operates in the Food Manufacturing industry, considered as essential during the pandemic, and whilst HM Government
restrictions have now been lifted, there still exists uncertainty in respect of the potential future impact of Covid-19. HM Government
restrictions when necessary to be put in place and the increase in hybrid working, means more meals are expected to be eaten at home
and hence increased demand for the Group’s product ranges. The Group’s first priority remains the health and wellbeing of its colleagues,
customers and other stakeholders and to date the Group has experienced no net financial adverse impact of the Covid-19 pandemic with
elevated levels of demand seen.
The Directors have rigorously reviewed the situation relating to inflationary pressures across the industry driven by global supply chain
disruption as a result of Covid-19 and the current global political uncertainty driven by the conflict in Ukraine and have modelled a series
of ‘downside case’ scenarios impacting future financial performance, cash flows and covenant compliance, that cover a period of at least
12 months from the date of approval of the financial statements. These downside cases represent severe but plausible scenarios and
include assumptions relating to an estimate of the impact of inflation during the period, net of estimated recovery and the closure of a
proportion of manufacturing sites due to colleague absence as opposed to Government imposed guidelines. Further detail of the risks
model can be seen in the viability statement on page 58. The Directors continue to believe that the risk of enforced site closures is low
supported by there having been no manufacturing site closures and a large proportion of colleagues have received a vaccination. The
Directors have also considered driver shortages and climate change that may have an adverse impact on supply of, or the demand for
certain product groups and actions that retailers could take impacting financial performance.
Whilst the downside scenarios are severe but plausible, it is considered by the Directors to be prudent, having an adverse impact on
revenue, margin and cash flow. The Directors, in response, identified mitigating actions within their control, that would reduce costs,
optimising cashflow and liquidity. Amongst these are the following actions reducing capital expenditure, reducing marketing spend and
delaying or cancelling discretionary spend. The Directors have assumed no significant structural changes to the business will be needed in
any of the scenarios modelled.
The Directors, after reviewing financial forecasts and financing arrangements, consider that the Group has adequate resources to continue
to meet its liabilities as they fall due for at least 12 months from the date of approval of this report. Accordingly, the Directors are satisfied
that it is appropriate to adopt the going concern basis in preparing its consolidated financial information.
Impact of the war in Ukraine
The Group primarily supplies the UK market but also supplies to other countries in Europe and rest of the world. The Group does not trade
in Ukraine or Russia and is therefore not directly affected by trading restrictions or sanctions. However, the Group could be affected in
future due to inflationary pressures such as increase in commodity prices (e.g. wheat, dairy), energy prices, changes in long term UK GDP
growth rate, and discount rates. The Group has reviewed the impact of these changes and have modelled sensitivities as part of the viability
and going concern analysis set out above and sensitivities of changes in key inputs to impairment testing of goodwill in note 11. The Group
will continue to monitor the situation as it develops.
Climate change
The Group has considered the impact of both physical and transitional climate change risks on the financial statements of the Group. The
Group does not consider there to be a material impact on the valuation of the Group’s assets or liabilities, including useful economic life of
property, plant and equipment, or on any significant accounting estimates or judgements. See note 13 for further details on how the trustee
of the Group’s pension scheme plans to integrate climate change considerations into their investment strategy. The Group will continue to
monitor the impact on valuations of assets and liabilities as government policy evolves.
The impact of climate change has been considered in the projected cash flows used for impairment testing. See note 11 for further details.
1.2 Basis of consolidation
(i) Subsidiaries
The consolidated financial statements include the financial statements of Premier Foods plc and entities controlled by the Company (its
subsidiaries). Control is achieved where the Company is exposed to or has rights to variable returns from involvement with an investee and
has the ability to affect those returns through its power over the investee.
All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
2. Accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies
have been consistently applied to all the periods presented, unless otherwise stated.
2.1 Revenue
Revenue comprises the invoiced value for the sale of goods net of sales rebates, discounts, value added tax and other taxes directly
attributable to revenue and after eliminating sales within the Group. Revenue is recognised when the Group transfers control of products
over to the customer. Transaction price per case is pre agreed per the price list with any discount related to an individual customer-run
promotional agreed in advance. Long-term discounts and rebates are part of a commercial arrangement and the Group uses actual and
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Annual Report for the 52 weeks ended 2 April 2022
 116
forecast sales to estimate the level of discount or rebate. The Group uses the ‘most likely amount’ method to estimate the value of the
variable consideration. Revenue is recognised on the following basis:
(i) Sale of goods
Sales of goods are recognised as revenue when a customer gains control of the goods, which typically coincides with the time when the
merchandise is delivered to customers and title passes.
(ii) Sales rebates and discounts
Sales related discounts comprise:
• Long-term discounts and rebates, which are sales incentives to customers to encourage them to purchase increased volumes and are
related to total volumes purchased and sales growth.
• Short-term promotional discounts, which are directly related to promotions run by customers.
Sales rebates and discount accruals are established at the time of sale based on management’s best estimate of the amounts necessary to
meet claims by the Group’s customers in respect of these rebates and discounts. Accruals are made for each individual promotion or rebate
arrangement and are based on the type and length of promotion and nature of customer agreement. At the time an accrual is made the
nature and timing of the promotion is typically known. Accumulated experience is used to estimate and provide for rebates and discounts
and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur.
(iii) Commercial income
Commercial income received from suppliers through rebates and discounts is recognised within cost of sales over the period(s) to which
the underlying contract or agreement relates. Accrued income is recognised for rebates on contracts covering the current period, for which
no cash was received at the balance sheet date. Deferred income is recognised for rebates that were received from suppliers at the balance
sheet date but relate to contracts covering future periods.
2.2 Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker
(‘CODM’). The CODM is responsible for allocating resources and assessing performance of the operating segments. See note 4 for further
details.
2.3 Foreign currency translation
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated
to the functional currency at the foreign exchange rate ruling at that date.
The results of overseas subsidiaries with functional currencies other than in sterling are translated into sterling at the closing rate of
exchange ruling in the period. The balance sheets of overseas subsidiaries are translated into sterling at the closing rate. Exchange
differences arising from retranslation at the period end exchange rates of the net investment in foreign subsidiaries are recorded as a
separate component of equity in reserves. All other exchange gains or losses are recorded in the statement of profit or loss.
2.4 Dividends
Dividend distributions to shareholders are recognised as a liability in the Group’s financial statements in the period in which the dividends
are approved by the shareholders, and for interim dividends in the period in which they are paid. Dividend distributions are recognised as a
liability in the period in which the dividends are approved by Group’s shareholders.
2.5 Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral
part of the Company’s cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow
statement.
2.6 Property, plant and equipment (‘PPE’)
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses.
PPE is initially recorded at cost. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to
its working condition for its intended use. Subsequent expenditure is added to the carrying value of the asset when it is probable that
incremental future economic benefits will transfer to the Group. All other subsequent expenditure is expensed in the period it is incurred.
Differences between the cost of each item of PPE and its estimated residual value are written off over the estimated useful life of the asset
using the straight-line method. Reviews of the estimated remaining useful lives and residual values of individual productive assets are
performed annually, taking account of commercial and technological obsolescence as well as normal wear and tear. Freehold land is not
depreciated. The useful economic lives of owned assets range from 15 to 50 years for buildings, 5 to 30 years for plant and equipment and
10 years for vehicles.
All items of PPE are reviewed for impairment when there are indications that the carrying value may not be fully recoverable.
Assets under construction represent the amount of expenditure recognised in the course of an asset’s construction. Directly attributable
costs that are capitalised as part of PPE include employee costs and an appropriate portion of relevant overheads. Depreciation of an
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FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
2. Accounting policies CONTINUED
asset is recognised from the time it is available for use. The difference between the carrying value of disposed assets and the net disposal
proceeds is recognised in profit or loss.
2.7 Intangible assets
Goodwill
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is
tested annually for impairment.
In addition to goodwill, the Group recognises the following intangible assets:
Acquired intangible assets
Acquired brands and licences that are controlled through custody or legal rights and that could be sold separately from the rest of the
business are capitalised, where fair value can be reliably measured. All these assets are considered to have finite lives and are amortised on
a straight-line basis over their estimated useful economic lives that range from 20 to 40 years for brands and 10 years for licences.
Software
Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the
Group are recognised as intangible assets when the project or process is technically and commercially feasible. Directly attributable costs
that are capitalised as part of the software product include the software development employee costs and an appropriate portion of
relevant overheads.
Software development costs are amortised over their estimated useful lives on a straight-line basis over a range of 3 to 10 years.
The useful economic lives of intangible assets are determined based on a review of a combination of factors including the asset ownership
rights acquired and the nature of the overall product life cycle. Reviews of the estimated remaining useful lives and residual values of
individual intangible assets are performed annually.
Research
Expenditure on research activities is charged to the statement of profit or loss in the period in which it is incurred.
2.8 Impairment
The carrying values of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at least annually
to determine whether there is an indication of impairment. For goodwill and other intangible assets with indefinite useful lives, the
recoverable amount is estimated each year at the same time. Assets that are subject to amortisation are assessed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. Non-financial assets, other than goodwill,
that have suffered an impairment loss are reviewed for possible reversal of the impairment at each reporting date.
Where an indication of impairment exists, the recoverable amount is estimated based on the greater of its value in use and its fair value
less costs to sell. In assessing the fair value less costs to sell, the market approach is often used to derive market multiples from a set of
comparative assets.
The Group reviews its identified CGUs for the purposes of testing goodwill on an annual basis, taking into consideration whether assets
generate independent cash inflows. The recoverable amounts of CGUs are determined based on the higher of fair value less costs of
disposal and value in use calculations. These calculations require the use of estimates.
Impairment losses are recognised in the statement of profit or loss in the period in which they occur.
For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that
generate cash inflows from continuing use that are largely independent of the cash flows of other assets or groups of assets.
2.9 Finance cost and income
Finance cost
Borrowing costs are accounted for on an accruals basis in the statement of profit or loss using the effective interest method.
Finance income
Finance income is recognised on a time proportion basis, taking into account the principal amounts outstanding and the interest rates
applicable, taking into consideration the interest element of derivatives.
2.10 Leases
Lease recognition
At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months
or less and do not contain a purchase option, and lease contracts for which the underlying asset is of low value (‘low-value assets’).
For leases of properties in which the Group is a lessee, it has applied the practical expedient permitted by IFRS 16 and will account for each
lease component and any associated non-lease components as a single lease component.
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Right of use assets
The Group recognises right of use assets at the commencement date of the lease. Right of use assets are measured at cost, less
accumulated depreciation and impairment losses and adjusted for any re-measurement of lease liabilities. The cost of right of use assets
includes the amount of lease liabilities recognised, adjusted for any lease payments made at or before the commencement date, less any
lease incentives received. Right of use assets are depreciated over the shorter of the asset’s useful life or the lease term on a straight-
line basis. Right of use assets are subject to and reviewed regularly for impairment. Depreciation on right of use assets is predominantly
recognised in cost of sales and administration costs in the consolidated statement of profit and loss.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of the lease payments to
be made over the lease term. Lease payments include fixed and variable lease payments that depend on an index or rate less any lease
incentives receivable. Any variable lease payments that do not depend on an index or rate are recognised as an expense in the period in
which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date if the
interest rate implicit in the lease is not readily determinable. Generally, the Group uses its incremental borrowing rate as the discount rate.
The average incremental borrowing rate used for the purposes of calculating the present value of lease payments is 3.39%.
After the commencement date, the lease liability is increased to reflect the accretion of interest and reduced for lease payments made. In
addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term or a change in the fixed
lease payments. Interest charges are included in finance costs in the consolidated statement of profit and loss and included within cash
used in financing activities.
Short-term leases and leases of low-value items
The Group has elected not to recognise right of use assets and lease liabilities for short-term leases of machinery and equipment that have
a lease term of less than 12 months and leases of low-value assets. Lease payments relating to short-term leases and leases of low-value
assets are recognised as an expense on a straight-line basis over the lease term.
2.11 Inventories
Inventories are stated at the lower of cost and net realisable value. Where appropriate, cost includes production and other attributable
overhead expenses as described in IAS 2 Inventories. Cost is calculated on a first-in, first-out basis by reference to the invoiced value of
supplies and attributable costs of bringing the inventory to its present location and condition. Net realisable value is the estimated selling
price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.
All inventories are reduced to net realisable value where this is lower than cost.
A provision is made for slow moving, obsolete and defective inventory where appropriate.
2.12 Taxation
Income tax on the profit or loss for the period comprises current and deferred tax.
Current tax
Income tax is recognised in the statement of profit or loss except to the extent that it relates to items recognised directly in other
comprehensive income (‘OCI’) in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the
period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous
periods.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred taxation is not provided on the initial
recognition of an asset or liability in a transaction, other than in a business combination, if at the time of the transaction there is no effect
on either accounting or taxable profit or loss.
Deferred tax is measured at the tax rates that are expected to apply in the periods in which the asset or liability is settled based on tax rates
(and tax laws) that have been enacted or substantively enacted as at the balance sheet date.
The measurement of deferred tax assets and liabilities reflect the directors’ intention regarding the manner of recovery of an asset or
settlement of a liability.
For the purpose of recognising deferred tax on the pension scheme surplus, withholding tax (at 35%) would apply for any surplus being
refunded to the Group at the end of the life of the scheme. Corporation tax (at 19%) would apply for any surplus expected to unwind over
the life of the scheme. In the spring budget of 2021, the corporation tax rate increased from the current 19% to 25% starting April 2023.
Therefore, the deferred tax balances have been restated between 22% to 25% depending on the rate they are expected to unwind.
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FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
2. Accounting policies CONTINUED
The directors have concluded that the future corporation tax rate of 25% should apply to the recognition of deferred tax on the pension
scheme surplus, reflecting the directors’ intention regarding the manner of recovery of the deferred tax asset.
Deferred tax is recognised in the statement of profit or loss except when it relates to items credited or charged directly to OCI, in which case
the deferred tax is also recognised in equity.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary
difference can be utilised. Their carrying amount is reviewed at each balance sheet date on the same basis.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and when the Group
intends to settle its current tax assets and liabilities on a net basis.
When assessing whether the recognition of a deferred tax asset can be justified, and if so at what level, the directors take into account the
following:
• Historic business performance
• Projected profits or losses and other relevant information that allow profits chargeable to corporation tax to be derived
• The total level of recognised and unrecognised losses that can be used to reduce future forecast taxable profits
• The period over which there is sufficient certainty that profits can be made that would support the recognition of an asset
Further disclosures of the amounts recognised (and unrecognised) are contained within note 8.
2.13 Employee benefits
Group companies provide a number of long-term employee benefit arrangements, primarily through pension schemes. The Group has both
defined benefit and defined contribution schemes.
Defined benefit plan
A defined benefit plan is a post-employment benefit plan that defines the amount of pension benefit that an employee will receive on
retirement, usually dependent on factors such as age, years of service and compensation.
The liability or surplus recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined
benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for remeasurement and past
service costs. Defined benefit obligations are calculated using assumptions determined by the Group with the assistance of independent
actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows using yields of high-quality corporate bonds that are denominated in the currency in which the benefits will
be paid, and that have terms to maturity approximating to the terms of the related pension liability.
Remeasurement arising from experience adjustments and changes in actuarial assumptions are charged or credited to the statement of
comprehensive income in the period in which they arise.
Past service costs, administration costs, and the net interest on the net defined benefit liability or surplus are recognised immediately in the
statement of profit or loss.
Curtailments are recognised as a past service cost when the Group makes a significant reduction in the number of employees covered by a
plan or amends the terms of a defined benefit plan so that a significant element of future service by current employees no longer qualifies
for amended benefits.
Plan assets of the defined benefit schemes include a number of assets for which quoted prices are not available. At each reporting date, the
Group determines the fair value of these assets with reference to most recently available information. The trustees of the schemes have
integrated climate change considerations into their long-term decision making and reporting processes. See note 13 for further details.
To the extent a surplus arises under IAS 19, the Group ensures that it can recognise the associated asset in line with IFRIC 14 with no
restrictions. There are no restrictions on the current realisability of the surplus.
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Group pays fixed contributions into a separate entity and
will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are
recognised as an expense in the income statement in the periods during which services are rendered by employees. Differences between
contributions payable in the period and contributions actually paid are recognised as either accruals or prepayments in the balance sheet.
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Annual Report for the 52 weeks ended 2 April 2022
 120
2.14 Provisions
Provisions (for example property exit costs) are recognised when the Group has present legal or constructive obligations as a result of
past events, that can be reliably measured, and it is probable that an outflow of resources will be required to settle the obligation. Where
material, the Group discounts its provisions using a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a
finance expense.
2.15 Financial instruments
Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual
provisions of the instrument.
Trade and other receivables
Trade and other receivables are initially measured at the transaction price and at the point of recognition an expected credit loss is
recognised to reflect the future risk of default. Trade receivables are subsequently measured at amortised cost less any additional, specific
provisions for impairment. A specific provision is made for impairment when there is objective evidence that the Group will not be able
to collect all amounts due according to the terms of the receivables. Trade and other receivables are written off when the Group has no
reasonable expectation of recovering the amounts due.
Trade and other receivables are discounted when the time value of money is considered material. The Group applies the IFRS 9 simplified
approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables and contract assets are grouped based on shared credit risk characteristics and the
days past due. The expected loss rates are based on the historical credit losses adjusted to reflect current and forward-looking information
on economic factors affecting the ability of the customers to settle the receivables. The Group has therefore concluded that the expected
loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.
The Group has certain trade receivables which are subject to a trade receivable purchase arrangement under a non-recourse facility. Trade
receivables that are sold without recourse are de-recognised when the risks and rewards of the receivables have been fully transferred
to the facility provider. The risks and rewards of the receivables are considered to be fully transferred on receipt of proceeds from the
facility provider to settle the debtor. The facility provider has no recourse to the Group in the event of non-payment by the debtor once the
proceeds have been received from the facility provider. The associated interest is recognised as interest expense in the income statement.
Bank borrowings
Interest-bearing bank loans and overdrafts are measured initially at fair value and subsequently at amortised cost, using the effective
interest rate method. Any difference between the proceeds (net of transaction costs and inclusive of debt issuance costs) and the
settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Group’s accounting policy for
borrowing costs.
Trade and other payables
Trade and other payables are initially measured at fair value and subsequently measured at amortised cost. Trade payables and other
liabilities are discounted when the time value of money is considered material.
Equity instruments
Equity instruments issued by the Company are recorded at the amount of the proceeds received, net of directly attributable issue costs.
Interest rate benchmark reform
The Group adopted ‘Interest Rate Benchmark Reform – Phase II’ – Amendments to IFRS 9 ‘Financial Instruments’, IAS 39 ‘Financial
Instruments: Recognition and Measurement’, IFRS 7 ‘Financial Instruments: Disclosures’ and IFRS 16 ‘Leases’ with effect from 4 April 2021.
The Group does not apply hedge accounting and as at 2 April 2022 there were no financial instruments held by the Group that referenced
GBP LIBOR. The Group’s new revolving credit facility entered in May 2021 is linked to SONIA. As such the amendment described above do
not have a material impact on the financial statements of the Group. See note 18 and 19 for further details.
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FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
3. Significant estimates and judgements
The following are areas of particular significance to the Group’s financial statements and may include the use of estimates, which is
fundamental to the compilation of a set of financial statements. Results may differ from actual amounts.
Significant accounting estimates
The following are considered to be the key estimates within the financial statements:
3.1 Deferred tax
All balances giving rise to deferred tax liabilities are recognised in full, whereas deferred tax assets are only recognised to the extent at
which they are recoverable. Management performs an assessment on an annual basis to assess the extent of future taxable profits that
will be available against which the tax losses can be utilised. The key assumptions underlying the assessment is availability of future taxable
profits and the underlying revenue growth and divisional contribution margin growth. Revenue growth is forecast based on known or
forecast customer sales initiatives, including, to the extent agreed, customer business plans or agreements for the next period, current and
forecast new product development, promotional and marketing strategy, and specific category or geographical growth. External factors,
including the consumer environment, are also taken into account in the more short-term forecasts.
The taxable profits for Year 1 to 3 are based on the latest Board approved Budget and strategic plans. For recoverability purposes taxable
profits are assumed to remain flat from year 3 onward based on which, the tax losses will be fully utilised within 20 years. A reasonable
change in the key assumptions will not lead to a material change in the deferred tax balance recognised and a material adjustment in the
carrying value of the deferred tax asset is not expected in the next 12 months.
Further disclosures are contained within note 8.
3.2 Employee benefits
The present value of the Group’s defined benefit pension obligations depends on a number of actuarial assumptions. The primary
assumptions used include the discount rate applicable to scheme liabilities, the long-term rate of inflation and estimates of the mortality
applicable to scheme members. Each of the underlying assumptions is set out in more detail in note 13.
At each reporting date, and on a continuous basis, the Group reviews the macro-economic, Company and scheme specific factors
influencing each of these assumptions, using professional advice, in order to record the Group’s ongoing commitment and obligation to
defined benefit schemes in accordance with IAS 19 (Revised).
Plan assets of the defined benefit schemes include a number of assets for which quoted prices are not available. At each reporting date, the
Group determines the fair value of these assets with reference to most recently available asset statements from fund managers.
Where pensions asset valuations were not available at the reporting date, as is usual practice, valuations at 31 December 2021 are rolled
forward for cash movements to end of March 2022 to estimate the valuations for these assets. This approach is principally relevant
for Infrastructure Funds, Private Equity, Absolute Return Products, Property Assets, Illiquid Credits and Global Credits. Management
have reviewed the individual investments to establish where valuations are not expected to be available for inclusion in these financial
statements, movements in the most comparable indexes have then been applied to these investments at a category level to establish any
potential estimation uncertainty within the results.
3.3 Goodwill
Impairment reviews in respect of goodwill are performed at least annually and more regularly if there is an indicator of impairment.
Impairment reviews in respect of intangible assets are performed when an event indicates that an impairment review is necessary.
Examples of such triggering events include a significant planned restructuring, a major change in market conditions or technology,
expectations of future operating losses, or a significant reduction in cash flows. In performing its impairment analysis, the Group takes into
consideration these indicators including the difference between its market capitalisation and net assets.
The Group has considered the impact of the assumptions used on the calculations and has conducted sensitivity analysis on the value in use
calculations of the CGUs carrying values for the purposes of testing goodwill. See note 11 for further details.
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Annual Report for the 52 weeks ended 2 April 2022
 122
3.4 Commercial arrangements
Sales rebates and discounts are accrued on each relevant promotion or customer agreement and are charged to the statement of profit
or loss at the time of the relevant promotional buy-in as a deduction from revenue. Accruals for each individual promotion or rebate
arrangement are based on the type and length of promotion and nature of customer agreement. At the time an accrual is made the nature,
funding level and timing of the promotion is typically known. Areas of estimation are sales volume/activity, phasing and the amount of
product sold on promotion.
For short-term promotions, the Group performs a true up of estimates where necessary on a monthly basis, using real time customer sales
information where possible and finally on receipt of a customer claim which typically follows 1-2 months after the end of a promotion. For
longer-term discounts and rebates the Group uses actual and forecast sales to estimate the level of rebate. These accruals are updated
monthly based on latest actual and forecast sales. A reasonable change in the key assumption will not lead to a material change in the
balance recognised and a material adjustment is not expected in the 12 months of the estimate.
Judgements
The following are considered to be the key judgements within the financial statements:
3.5 Non-trading items
Non-trading items have been presented separately throughout the financial statements. These are items that management believes require
separate disclosure by virtue of their nature in order that the users of the financial statements obtain a clear and consistent view of the
Group’s underlying trading performance. In identifying non-trading items, management have applied judgement including whether i) the
item is related to underlying trading of the Group; and/or ii) how often the item is expected to occur.
4. Segmental analysis
IFRS 8 requires operating segments to be determined based on the Group’s internal reporting to the Chief Operating Decision Maker
(‘CODM’). The CODM has been determined to be the Executive Leadership Team as it is primarily responsible for the allocation of resources
to segments and the assessment of performance of the segments.
The Group’s operating segments are defined as ‘Grocery’, ‘Sweet Treats’, and ‘International’. The CODM reviews the performance by
operating segments. The Grocery segment primarily sells savoury ambient food products and the Sweet Treats segment sells primarily
sweet ambient food products. The International segment has been aggregated within the Grocery segment for reporting purposes as
revenue is below 10% of the Group’s total revenue and the segment is considered to have similar characteristics to that of Grocery as
identified in IFRS 8. There has been no change to the segments during the period.
The CODM uses Divisional contribution as the key measure of the segments’ results. Divisional contribution is defined as gross profit after
selling, marketing and distribution costs. Divisional contribution is a consistent measure within the Group and reflects the segments’
underlying trading performance for the period under evaluation.
The Group uses trading profit to review overall Group profitability. Trading profit is defined as profit/loss before tax before net finance costs,
amortisation of intangible assets, fair value movements on foreign exchange and other derivative contracts, net interest on pensions and
administrative expenses, and any material items that require separate disclosure by virtue of their nature in order that users of the financial
statements obtain a clear and consistent view of the Group’s underlying trading performance.
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 123
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
4. Segmental analysis CONTINUED
The segment results for the period ended 2 April 2022 and for the period ended 3 April 2021 and the reconciliation of the segment
measures to the respective statutory items included in the consolidated financial statements are as follows:
52 weeks ended 2 April 2022 53 weeks ended 3 April 2021
Grocery
£m
Sweet
Treats
£m
Total
£m
Grocery
£m
Sweet
Treats
£m
Total
£m
External revenues 647.7 252.8 900.5 702.6 244.4 947.0
Divisional contribution 160.2 33.4 193.6 174.7 23.2 197.9
Group and corporate costs (45.3) (46.6)
Trading profit 148.3 151.3
Amortisation of intangible assets (27.0) (30.4)
Fair value movements on foreign exchange
and other derivative contracts
1
4.4 (2.3)
Reversal of impairment losses on financial
assets
2
– 15.7
Profit on disposal of investment in associate
2
– 16.9
Net interest on pensions and administrative
expenses 4.2 9.7
Non-trading items:
3
– GMP equalisation charge (0.3) (2.9)
– Restructuring costs – (4.9)
– Other non-trading items
4
1.5 (0.5)
Operating profit 131.1 152.6
Finance cost (29.0) (36.2)
Finance income
2
0.5 6.4
Profit before taxation 102.6 122.8
Depreciation
5
(11.2) (8.0) (19.2) (11.5) (7.6) (19.1)
1
The gain of £4.4m (2020/21: loss of £2.3m) reflects changes in fair value rate during the 52-week period and movement in nominal value of the instruments held at 2 April 2022
from the 3 April 2021 position.
2
In April 2014, the Group entered into a partnership with The Gores Group LLC in respect of Hovis Holdings Limited (‘Hovis’). This partnership, of which the Group held a 49%
equity interest, was subsequently written off in FY 2015/16. On 5 November 2020, the Group completed the sale of its interest in Hovis to Endless LLP. As part of the sale, the
Group has received a total consideration of £37.3m, of which £16.9m was in respect of equity and £20.4m reflected the settlement of the outstanding loan to associate including
interest of £4.7m.
3
Non-trading items in the prior period include restructuring costs of £4.9m relating primarily to costs associated with the Strategic review and integration of the
Knighton business.
4
Other in the current period relates primarily to the resolution of a legacy legal matter.
5
Depreciation in the period ended 2 April 2022 includes £2.0m (2020/21: £2.2m) of depreciation of IFRS 16 right of use assets.
Revenues in the period ended 2 April 2022, from the Group’s four principal customers, which individually represent over 10% of total Group
revenue, are £224.8m, £129.0m, £97.6m and £91.7m (2020/21: £240.2m, £138.8m, £112.0m and £98.5m). These revenues relate to both
the Grocery and Sweet Treats reportable segments.
The Group primarily supplies the UK market, although it also supplies certain products to other countries in Europe and the rest of the
world. The following table provides an analysis of the Group’s revenue, which is allocated on the basis of geographical market destination,
and an analysis of the Group’s non-current assets by geographical location.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 124
Revenue
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
United Kingdom 847.1 892.9
Other Europe 26.2 28.5
Rest of world 27.2 25.6
Total 900.5 947.0
Non-current assets
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
United Kingdom 1,130.4 1,155.3
Non-current assets exclude deferred tax assets and net retirement benefit assets.
5. Operating profit
5.1 Analysis of costs by nature
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Employee benefits expense (note 6) (183.0) (182.5)
Depreciation of property, plant and equipment (note 10) (19.2) (19.1)
Amortisation of intangible assets (note 12) (27.0) (30.4)
Repairs and maintenance expenditure (28.4) (27.5)
Research and development costs (7.8) (7.2)
Non-trading items
– GMP equalisation charge
1
(0.3) (2.9)
– Restructuring costs – (4.9)
– Other non-trading items 1.5 (0.5)
Auditor remuneration (note 5.2) (1.2) (0.9)
1
For further details on GMP equalisation please refer to note 13.
5.2 Auditor’s remuneration
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Fees payable to the Group’s auditor for the audit of the consolidated and parent company accounts of
Premier Foods plc (0.9) (0.7)
- The audit of the Group’s subsidiaries, pursuant to legislation (0.1) (0.1)
Fees payable to the Group’s auditor and its associates for other services:
– Audit related assurance services (0.1) (0.1)
– Services relating to corporate finance transactions (0.1) –
Total auditor remuneration (1.2) (0.9)
The total operating profit charge for auditor remuneration was £1.2m (2020/21: £0.9m).
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 125
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
6. Employees
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Employee benefits expense
Wages, salaries and bonuses (155.5) (153.6)
GMP past service cost related to defined benefit pension schemes (note 13) (0.3) (2.9)
Social security costs (15.4) (14.8)
Termination benefits (0.4) (0.3)
Share options granted to directors and employees (3.4) (3.1)
Contributions to defined contribution schemes (note 13) (8.0) (7.8)
Total (183.0) (182.5)
Average monthly number of people employed (including executive and non-executive directors):
2021/22
Number
2020/21
Number
Average monthly number of people employed
Management 578 531
Administration 414 343
Production, distribution and other 3,378 3,333
Total 4,370 4,207
Directors’ remuneration is disclosed in the audited section of the Directors’ Remuneration Report on pages 79 to 95, which forms part of
these consolidated financial statements.
7. Finance income and costs
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Interest payable on bank loans and overdrafts (4.3) (5.7)
Interest payable on senior secured notes (13.4) (25.9)
Interest payable on revolving facility (0.3) (0.6)
Other interest receivable
1
0.1 0.2
Amortisation of debt issuance costs (2.1) (2.9)
(20.0) (34.9)
Write off of financing costs
2
(4.3) (1.3)
Early redemption fee
3
(4.7) –
Total finance cost (29.0) (36.2)
Interest receivable on bank deposits 0.3 1.7
Other finance income 0.2 4.7
Total finance income 0.5 6.4
Net finance cost (28.5) (29.8)
1
Included in other interest receivable is £0.8m charge (2020/21: £0.9m charge) relating to non-cash interest costs arising following the adoption of IFRS 16 and £0.9m credit
(2020/21: £1.1m credit) relating to the unwind of the discount on certain of the Group’s long-term provisions.
2
Relates to the refinancing of the senior secured fixed rate notes due 2023 and revolving credit facility in the current period and redemption of senior secured floating rate notes
due 2022 in the previous period. See note 19 for further details.
3
Relates to a non-recurring payment arising on the early redemption of the £300m senior secured fixed rate notes due to mature in October 2023 as part of the refinancing of the
Group’s debt in June 2021.
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Annual Report for the 52 weeks ended 2 April 2022
 126
8. Taxation
Current tax
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Current tax
– Current period (6.4) (9.2)
Deferred tax
– Current period (16.5) (9.2)
– Prior periods 1.9 1.6
– Changes in tax rate (4.1) –
Income tax charge (25.1) (16.8)
Tax relating to items recorded in other comprehensive income included:
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Corporation tax credit on pension movements 6.4 9.2
Deferred tax charge on increase of corporate tax rate (17.9) –
Deferred tax credit on prior year 1.6 –
Deferred tax (charge)/credit on pension movements (97.9) 132.9
(107.8) 142.1
The applicable rate of corporation tax for the period is 19%. As set out in the Finance Act of 2021, the corporation tax rate will increase from
the current 19% to 25% starting April 2023. Therefore, the deferred tax balances have been restated between 22% to 25% depending on the
rate at which they are expected to unwind. As a result of the higher tax rate a tax charge of £4.1m has been recorded in the consolidated
statement of profit or loss and a tax charge of £17.9m has been recorded in other comprehensive income.
The tax charge for the period differs from the standard rate of corporation tax in the United Kingdom of 19.0% (2020/21: 19.0%). The
reasons for this are explained below:
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Profit before taxation 102.6 122.8
Tax charge at the domestic income tax rate of 19.0% (2020/21: 19.0%) (19.5) (23.3)
Tax effect of:
Non-deductible items (0.8) (1.4)
Other disallowable items – (0.3)
Capital gain on disposal of business – 6.6
Adjustment to restate opening deferred tax balances (4.1) –
Difference between current and deferred tax rate (3.1) –
Tax incentives 0.5 –
Adjustments to prior periods 1.9 1.6
Income tax charge (25.1) (16.8)
Corporation tax losses are not recognised where future recoverability is uncertain.
The difference between current and deferred tax rate of £3.1m relates to the impact of the current tax rate being 19% and the current year
deferred tax movements being measured at between 22% and 25%.
The adjustments to prior periods of £1.9m (2020/21: £1.6m) relates primarily to the changes in prior period intangibles and capital
allowances following verifications in submitted returns.
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 127
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
8. Taxation CONTINUED
Deferred tax
Deferred tax is calculated in full on temporary differences using the tax rate appropriate to the jurisdiction in which the asset/(liability)
arises and the tax rates that are expected to apply in the periods in which the asset or liability is settled.
2021/22
£m
2020/21
£m
At 4 April 2021 / 29 March 2020 (57.4) (184.9)
Charged to the statement of profit or loss (18.7) (7.6)
(Charged)/credited to other comprehensive income (114.2) 132.9
Credited to equity 0.5 2.2
At 2 April 2022 / 3 April 2021 (189.8) (57.4)
The Group has not recognised £2.2m of deferred tax assets (2020/21: £1.7m not recognised) relating to UK corporation tax losses. In
addition, the Group has not recognised a tax asset of £83.9m (2020/21: £83.9m) relating to Advanced Corporation Tax (ACT) and £76.6m
(2020/21: £58.1m) relating to capital losses. Under current legislation these can generally be carried forward indefinitely.
Deferred tax liabilities
Intangibles
£m
Retirement
benefit
obligation
£m
Leases
£m
Other
£m
Total
£m
At 29 March 2020 (52.0) (232.7) (2.9) – (287.6)
Current period credit/(charge) 1.9 (2.1) – – (0.2)
Reclassified from deferred tax assets – – – (1.0) (1.0)
Credited to other comprehensive income – 132.9 – – 132.9
At 3 April 2021 (50.1) (101.9) (2.9) (1.0) (155.9)
At 4 April 2021 (50.1) (101.9) (2.9) (1.0) (155.9)
Charge due to change in corporate tax rate
– To statement of profit or loss (15.4) (9.5) (0.9) (0.3) (26.1)
– To other comprehensive income – (22.7) – – (22.7)
Current period credit/(charge) 1.3 (3.5) – – (2.2)
Charged to other comprehensive income – (97.9) – – (97.9)
Prior period (charge)/credit
– To statement of profit or loss (0.3) – – – (0.3)
– To other comprehensive income – 1.6 – – 1.6
At 2 April 2022 (64.5) (233.9) (3.8) (1.3) (303.5)
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 128
Deferred tax assets
Accelerated
tax
depreciation
£m
Share-based
payments
£m
Losses
£m
Other
£m
Total
£m
At 29 March 2020 56.7 0.1 45.9 – 102.7
Current period (charge)/credit (8.6) 0.4 (0.9) 0.1 (9.0)
Reclassified to deferred tax liabilities – – – 1.0 1.0
Credited to equity – 2.2 – – 2.2
Prior period credit
– To statement of profit or loss 1.4 – – 0.2 1.6
At 3 April 2021 49.5 2.7 45.0 1.3 98.5
At 4 April 2021 49.5 2.7 45.0 1.3 98.5
Credit due to change in corporate tax rate
– To statement of profit or loss 12.7 – 9.1 0.2 22.0
– To other comprehensive income – – 4.8 – 4.8
– To equity – 0.1 – – 0.1
Current period (charge)/credit (13.1) 0.7 (1.2) (0.7) (14.3)
Credited to equity – 0.4 – – 0.4
Prior period credit
- To statement of profit or loss 2.2 – – – 2.2
At 2 April 2022 51.3 3.9 57.7 0.8 113.7
Deferred tax asset on losses and accelerated tax depreciation £m
As at 2 April 2022 23.1
As at 3 April 2021 28.4
Net deferred tax liability £m
As at 2 April 2022 (212.9)
As at 3 April 2021 (85.8)
Where there is a legal right of offset and an intention to settle as such, deferred tax assets and liabilities may be presented on a net basis.
This is the case for most of the Group’s deferred tax balances except non-trading losses of £23.1m (2020/21: £18.7m) and £nil (2020/21:
£9.7m) towards accelerated tax depreciation. The remainder of deferred tax assets have therefore been offset in the tables above.
Substantial elements of the Group’s deferred tax assets and liabilities, primarily relating to the defined benefit pension obligation, are
greater than one year in nature.
9. Earnings per share
Basic earnings per share has been calculated by dividing the profit attributable to owners of the parent of £77.5m (2020/21: £106.0m
profit) by the weighted average number of ordinary shares of the Company.
Weighted average shares
2021/22
Number (m)
2020/21
Number (m)
Weighted average number of ordinary shares for the purpose of basic earnings per share 858.8 851.4
Effect of dilutive potential ordinary shares:
– Share options 17.0 17.1
Weighted average number of ordinary shares for the purpose of diluted earnings per share 875.8 868.5
Premier Foods plc
www.premierfoods.co.uk
 129
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
9. Earnings per share CONTINUED
Earnings per share calculation
52 weeks ended 2 April 2022 53 weeks ended 3 April 2021
Basic
Dilutive
effect of
share options Diluted Basic
Dilutive
effect of
share options Diluted
Profit after tax (£m) 77.5 77.5 106.0 106.0
Weighted average number of shares (m) 858.8 17.0 875.8 851.4 17.1 868.5
Earnings per share (pence) 9.0 (0.2) 8.8 12.5 (0.3) 12.2
Dilutive effect of share options
The dilutive effect of share options is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The only dilutive potential ordinary shares of the Company are share options and share
awards. A calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the
average annual market share price of the Company’s shares) based on the monetary value of the share awards and the subscription rights
attached to the outstanding share options.
No adjustment is made to the profit or loss in calculating basic and diluted earnings per share.
Adjusted earnings per share (‘Adjusted EPS’)
Adjusted earnings per share is defined as trading profit less net regular interest, less a notional tax charge at 19.0% (2020/21: 19.0%)
divided by the weighted average number of ordinary shares of the Company.
Net regular interest is defined as net finance cost after excluding write-off of financing costs, early redemption fees, other interest payable
and other interest receivable.
Trading profit and Adjusted EPS have been reported as the directors believe these assists in providing additional useful information on the
underlying trends, performance and position of the Group.
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Trading profit 148.3 151.3
Less net regular interest (19.8) (33.4)
Adjusted profit before tax 128.5 117.9
Notional tax at 19.0% (2020/21: 19%) (24.4) (22.4)
Adjusted profit after tax 104.1 95.5
Average shares in issue (m) 858.8 851.4
Adjusted EPS (pence) 12.1 11.2
Dilutive effect of share options (0.2) (0.2)
Diluted adjusted EPS (pence) 11.9 11.0
Net regular interest
Net finance cost (28.5) (29.8)
Exclude other interest receivable (0.2) (4.7)
Exclude write-off of financing costs 4.3 1.3
Exclude early redemption fee 4.7 –
Exclude other interest receivable (0.1) (0.2)
Net regular interest (19.8) (33.4)
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 130
10. Property, plant and equipment
Land and
buildings
£m
Plant and
equipment
£m
Assets under
construction
£m
Right of use
Assets
£m
Total
£m
Cost
At 29 March 2020 102.0 323.0 9.3 14.2 448.5
Additions 0.3 7.2 11.3 1.0 19.8
Disposals (2.2) (1.5) – (0.9) (4.6)
Remeasurement – – – (1.4) (1.4)
Reclassified from/(to) intangibles – 0.1 (0.5) – (0.4)
Transferred into use 0.2 5.6 (5.8) – –
At 3 April 2021 100.3 334.4 14.3 12.9 461.9
Balance at 4 April 2021 100.3 334.4 14.3 12.9 461.9
Additions 1.7 9.2 7.6 0.5 19.0
Disposals (1.5) (8.2) – (0.9) (10.6)
Remeasurement – – – (0.4) (0.4)
Reclassified from intangibles – – 0.2 – 0.2
Transferred into use 0.9 12.6 (13.5) – –
At 2 April 2022 101.4 348.0 8.6 12.1 470.1
Aggregate depreciation and impairment
At 28 March 2020 (44.4) (207.7) – (2.4) (254.5)
Depreciation charge (2.1) (14.8) – (2.2) (19.1)
Disposals 2.1 1.2 – 0.8 4.1
Impairment charge – (0.2) – (0.1) (0.3)
At 3 April 2021 (44.4) (221.5) – (3.9) (269.8)
Depreciation charge (2.2) (15.0) – (2.0) (19.2)
Disposals 1.4 7.5 – 0.9 9.8
At 2 April 2022 (45.2) (229.0) – (5.0) (279.2)
Net book value
At 3 April 2021 55.9 112.9 14.3 9.0 192.1
At 2 April 2022 56.2 119.0 8.6 7.1 190.9
Premier Foods plc
www.premierfoods.co.uk
 131
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
10. Property, plant and equipment CONTINUED
Included in the right of use assets are the following:
Land and
buildings
£m
Plant,
equipment
& other
1
£m
Total
£m
Cost
Balance at 29 March 2020 10.3 3.9 14.2
Additions 0.5 0.5 1.0
Disposals (0.1) (0.8) (0.9)
Remeasurement (1.4) – (1.4)
At 3 April 2021 9.3 3.6 12.9
Balance at 4 April 2021 9.3 3.6 12.9
Additions – 0.5 0.5
Disposals (0.3) (0.6) (0.9)
Remeasurement (0.4) – (0.4)
At 2 April 2022 8.6 3.5 12.1
Aggregate depreciation and impairment
At 28 March 2020 (1.3) (1.1) (2.4)
Depreciation charge (1.2) (1.0) (2.2)
Disposals 0.1 0.7 0.8
Impairment charge (0.1) – (0.1)
At 3 April 2021 (2.5) (1.4) (3.9)
Depreciation charge (1.1) (0.9) (2.0)
Disposals 0.3 0.6 0.9
At 2 April 2022 (3.3) (1.7) (5.0)
Net book value
At 3 April 2021 6.8 2.2 9.0
At 2 April 2022 5.3 1.8 7.1
1
Included in Plant, equipment & other are vehicles with a cost of £0.2m (2020/21: £0.2m) and NBV of £0.0m (2020/21: £0.1m)
The Group’s borrowings are secured on the assets of the Group including property, plant and equipment.
11. Goodwill
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Carrying value
Opening balance 646.0 646.0
Closing balance 646.0 646.0
Goodwill is allocated to the Group’s Grocery CGU. Goodwill impairment testing is performed at the Grocery CGU level, which is the lowest
level at which goodwill is allocated and monitored for internal reporting purposes.
Key assumptions
The key assumptions for calculating value in use are revenue growth, divisional contribution margin growth, long-term growth rate and
discount rate.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units. It is not amortised but is
tested annually for impairment.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 132
Cash flow assumptions
The cash flows used in the value in use calculation are post-tax cash flows based on the latest Board-approved budget for the first year and
the latest Board-approved forecasts in respect of the following two years which include consideration of the impact on the Group of climate
change and actions the Group are taking to reduce carbon emissions. An estimate of capital expenditure required to maintain these cash
flows is also made.
Two of the key assumptions when forecasting cash flows are revenue growth and divisional contribution margin.
Revenue growth is forecast based on known or forecast customer sales initiatives, including, to the extent agreed, customer business
plans or agreements for the next period, current and forecast new product development, promotional and marketing strategy, and specific
category or geographical growth. External factors, including the consumer environment, are also taken into account in the more short-term
forecasts. The compound revenue growth rate over the three-year forecast period is 4.9% (2020/21: 0.7%). The compound annual growth
rate has increased from 0.7% in prior period as a result of change in baseline revenue in the current period compared to a higher baseline
revenue due to Covid-19 related volumes in prior period.
Divisional contribution margin is forecast based on the projected mix of branded and non-branded sales, raw material input costs,
purchasing initiatives and marketing and distribution costs. Management have performed sensitivities on inflationary pressures driven by
disruption in global supply chain as a result of Covid-19 and conflict in Ukraine and were within the range of Group’s existing sensitivities as
disclosed within the table below.
Long term growth rate assumptions
For the purposes of impairment testing, the cash flows are extrapolated into perpetuity using growth assumptions relevant for the
business sector. The growth rate applied of 1.3% (2020/21: 1.1%) is based on the long-term growth in UK GDP as the directors expect food
consumption to follow GDP growth. This is not considered to be higher than the average long-term industry growth rate.
Discount rate assumptions
The discount rate applied to the cash flows is calculated using a post-tax rate based on the weighted average cost of capital (‘WACC’) which
would be anticipated for a market participant in the Group.
The Group has considered the impact of the current economic climate in determining the appropriate discount rate to use in impairment
testing. In the current period, the post-tax rate used to discount the forecast cash flows has been determined to be 7.4% (2020/21: 7.5%).
On a pre-tax basis a discount rate of 9.4% (2020/21: 9.1%) would have been applied.
Sensitivity analysis
An illustration of the sensitivity to reasonably possible changes in key assumptions in the impairment test for the Grocery CGU is as follows:
Reasonably possible change in assumption Impact on value in use
Revenue growth Increase/decrease by 1.5% Increase/decrease by £87.5m/£85.1m
Divisional contribution margin Increase/decrease by 2.0% Increase/decrease by £165.1m
Long-term growth rate Increase/decrease by 0.5% Increase/decrease by £121.1m/£102.6m
Discount rate Increase/decrease by 0.5% Decrease/increase by £112.0m/£132.2m
Under each of the above sensitivities no individual scenarios would trigger an impairment for the Grocery CGU. Under a combination of
reasonably possible scenarios and taking into account mitigating actions, no impairment would be triggered.
Goodwill impairment charge
There has been no goodwill impairment charge recognised in 2021/22 (2020/21: £nil).
Premier Foods plc
www.premierfoods.co.uk
 133
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
12. Other intangible assets
Software
£m
Licences
1
£m
Brands
1
£m
Customer
relationships
£m
Assets under
construction
£m
Total
£m
Cost
At 28 March 2020 144.1 28.0 665.2 134.8 3.3 975.4
Additions 2.9 – – – 3.1 6.0
Disposals (0.5) – – – – (0.5)
Reclassified (to)/from property, plant &
equipment (0.1) – – – 0.5 0.4
Transferred into use 2.9 – – – (2.9) –
At 3 April 2021 149.3 28.0 665.2 134.8 4.0 981.3
Additions 1.7 – – – 1.8 3.5
Disposals (19.9) – – – – (19.9)
Reclassified to property, plant & equipment – – – – (0.2) (0.2)
Transferred into use 3.6 – – – (3.6) –
At 2 April 2022 134.7 28.0 665.2 134.8 2.0 964.7
Accumulated amortisation and impairment
At 28 March 2020 (128.8) (28.0) (342.5) (134.8) – (634.1)
Disposals 0.5 – – – – 0.5
Amortisation charge (6.7) – (23.7) – – (30.4)
Impairment charge (0.1) – – – – (0.1)
At 3 April 2021 (135.1) (28.0) (366.2) (134.8) – (664.1)
Disposals 19.9 – – – – 19.9
Amortisation charge (7.1) – (19.9) – – (27.0)
At 2 April 2022 (122.3) (28.0) (386.1) (134.8) – (671.2)
Net book value
At 3 April 2021 14.2 – 299.0 – 4.0 317.2
At 2 April 2022 12.4 – 279.1 – 2.0 293.5
1
Updated to disclose brands and licences separately
All amortisation is recognised within administrative costs.
Included in the assets under construction additions for the period are £1.3m (2020/21: £1.1m) in respect of internal costs.
The Group’s borrowings are secured on the assets of the Group including other intangible assets.
The material brands held on the balance sheet are as follows:
Carrying
value at
2 April 2022
£m
Estimated
useful
life
remaining
Years
Bisto 89.5 15
Oxo 67.1 24
Batchelors 46.6 14
Mr Kipling 34.8 15
Sharwood's 19.5 15
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 134
13. Retirement benefit schemes
Defined benefit schemes
The Group operates a number of defined benefit schemes under which current and former employees have built up an entitlement to
pension benefits on their retirement. Although the Premier Foods Section, Premier Grocery Products Section and RHM Section identified
below are no longer separate schemes following the merger in 2020, historically, Premier Foods companies’ pension liabilities and ex-RHM
companies’ liabilities have been shown separately. These are as follows:
(a) The “Premier” Schemes, which comprise:
Premier Foods Pension Section of RHM Pension Scheme
Premier Grocery Products Pension Section of RHM Pension Scheme
Premier Grocery Products Ireland Pension Scheme (‘PGPIPS’)
Chivers 1987 Pension Scheme
Hillsdown Holdings Limited Pension Scheme
(b) The “RHM” Pension Schemes, which comprise:
RHM Section of the RHM Pension Scheme
Premier Foods Ireland Pension Scheme
The Premier Foods Pension Scheme (PFPS) and Premier Grocery Products Pension Scheme (PGPPS) were wound up following the merger
of assets and liabilities on a segregated basis with the RHM Pension Scheme in June 2020. The RHM Pension Scheme operates as three
sections, the RHM Section, Premier Foods Section and Premier Grocery Products Section.
The interim actuarial valuations for the new Premier Foods and Premier Grocery Products Sections as at 31 March 2021 have been agreed
and show a combined reduction in their deficits of £125m since April 2019. This has allowed the recovery plans for both Sections to be
shortened by two years. There is no change to the rate of deficit contributions paid in the short term.
The triennial valuation cycle continues with effect from 31 March 2022 for all three Sections of the RHM Pension Scheme.
The exchange rates used to translate the overseas euro based schemes are £1.00 = €1.1774 (2020/21: £1.00 = €1.1215) for the average rate
during the period, and £1.00 = €1.1881 (2020/21: £1.00 = €1.1740) for the closing position at period end.
All defined benefit schemes are held separately from the Company under Trusts. Trustees are appointed to operate the schemes in
accordance with their respective governing documents and pensions law. The schemes meet the legal requirement for member nominated
trustees’ representation on the trustee boards. Trustee directors undertake regular training and development to ensure that they are
equipped appropriately to carry out the role. In addition, each trustee board has appointed professional advisers to give them the specialist
expertise they need to support them in the areas of investment, funding, legal, covenant and administration.
The trustee boards generally meet at least four times a year to conduct their business. To support these meetings certain aspects of the
schemes’ operation are delegated to give specialist focus (e.g. investment, administration and compliance) to committees for which further
meetings are held as appropriate throughout the year. These committees regularly report to the full trustee boards.
The schemes invest through investment managers appointed by the trustees in a broad range of assets to support the security and funding
of their pension obligations. Asset classes used include government bonds, private equity, absolute return products, swaps, infrastructure,
illiquid credits and global credits.
The scheme assets do not include any of the Group’s own financial instruments, nor any property occupied by, or other assets used by, the
Group. The RHM Pension Scheme holds a security over the assets of the Group which ranks pari passu with the banks and bondholders in
the event of insolvency, up to a cap.
The schemes incorporate a Liability Driven Investment (LDI) strategy to more closely match the assets with changes in value of liabilities.
The RHM Pension Scheme uses assets including interest rate and inflation swaps, index linked bonds and infrastructure in its LDI strategy.
In setting the investment strategy, the primary concern for the trustee of the RHM Pension Scheme is to act in the best financial interests
of all beneficiaries, seeking the best return that is consistent with a prudent and appropriate level of risk. This includes the risk that
environmental, social and governance factors, including climate change, negatively impact the value of investments held if not understood
and evaluated properly. The trustee considers this risk by taking advice from its investment advisors when choosing asset classes, selecting
managers, and monitoring performance.
Premier Foods plc
www.premierfoods.co.uk
 135
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
13. Retirement benefit schemes CONTINUED
From 1 October 2022, the trustee is required by regulation to:
• implement climate change governance measures and produce a Taskforce on Climate-related Financial Disclosures (TCFD) report
containing associated disclosures; and
• publish its TCFD report on a publicly available website, accessible free of charge.
The trustee is on track to draft and disclose the scheme’s first TCFD report as part of the 2023 year-end reporting cycle.
The main risks to which the Group is exposed in relation to the funded pension schemes are as follows:
• Liquidity risk – the PF and PGP Sections of the RHM Pension Scheme have significant technical funding deficits which could increase.
The RHM Section of the RHM Pension Scheme is currently in surplus, but subsequent valuations could reveal a deficit. As such this could
have an adverse impact on the financial condition of the Group. The Group continues to monitor the pension risks closely working with
the trustees to ensure a collaborative approach.
• Mortality risk – the assumptions adopted make allowance for future improvements in life expectancy. However, if life expectancy
improves at a faster rate than assumed, this would result in greater payments from the schemes and consequently increases in the
schemes liabilities. The trustees review the mortality assumption on a regular basis to minimise the risk of using an inappropriate
assumption.
• Yield risk – a fall in government bond yields will increase the schemes liabilities and certain of the assets. However, the liabilities may
grow by more in monetary terms, thus increasing the deficit in the scheme.
• Inflation risk – the majority of the schemes liabilities increase in line with inflation and so if inflation is greater than expected, the
liabilities will increase.
• Investment risk – the risk that investments do not perform in line with expectations.
The exposure to the yield and inflation risks described above can be hedged by investing in assets that move in the same direction as the
liabilities in the event of a fall in yields, or a rise in inflation. The RHM Pension Scheme has largely hedged its inflation and interest rate
exposure to the extent of its funding level. Both the Premier Foods and Premier Grocery Products Sections are currently hedged to 80% for
interest rates and 80% to inflation.
The liabilities of the schemes are approximately 45% in respect of former active members who have yet to retire and approximately 55% in
respect of pensioner members already in receipt of benefits.
The average duration of the pension liabilities for the three Sections of the RHM Pension Scheme is 16.0 years (16.0 years for the RHM
Section; 15.5 years for the PF Section and 15.5 years for the PGP Section).
All pension schemes are closed to future accrual.
At the balance sheet date, the combined principal accounting valuation assumptions were as follows:
At 2 Apr 2022 At 3 Apr 2021
Premier
Schemes
RHM
Schemes
Premier
Schemes
RHM
Schemes
Discount rate 2.75% 2.75% 2.00% 2.00%
Inflation – RPI 3.60% 3.60% 3.25% 3.25%
Inflation – CPI 3.20% 3.20% 2.80% 2.80%
Future pension increases
– RPI (min 0% and max 5%) 3.35% 3.35% 3.10% 3.10%
– CPI (min 3% and max 5%) 3.65% 3.65% 3.40% 3.40%
For the smaller overseas schemes, the discount rate used was 1.75% (2020/21: 1.1%) and future pension increases were 2.6%
(2020/21: 1.6%).
At 2 April 2022 and 3 April 2021, the discount rate was derived based on a bond yield curve expanded to also include bonds rated AA by
one credit agency (and which might for example be rated A or AAA by other agencies).
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 136
The Group continued to set RPI inflation in line with the market break-even expectations less an inflation risk premium. The inflation risk
premium of 0.3% (2020/21: 0.3%), reflects an allowance for additional market distortions caused by the RPI reform proposals.
The Group has set the CPI assumption by assuming it is 1.0% p.a. lower than RPI pre 2030 (reflecting UKSA’s stated intention to make no
changes before 2030) and 0.1% lower than RPI post 2030 (2020/21: 0.0% post 2030), this being our expectation of the long-term average
difference between CPI and CPI-H.
Using this approach, the assumed difference between the RPI and CPI is an average of 0.40% (2020/21: 0.45%) per annum. The estimated
impact of the reduction in the difference between RPI and CPI is approximately £9.2m increase in defined benefit obligation in respect of
the schemes.
The assumptions take into account the timing of the expected future cashflows from the pension schemes.
The RHM scheme invests directly in interest rate and inflation swaps to protect from fluctuations in interest rates and inflation.
The mortality assumptions are based on standard mortality tables. The directors have considered the impact of the current Covid-19
pandemic on the mortality assumptions and consider that use of the updated Continuous Mortality Improvement (CMI) 2021 projections
released in March 2022 for the future improvement assumption a reasonable approach. Management considers the 2020 and 2021
mortality experience to be outliers and therefore have applied a 0% weight to the 2020 and 2021 mortality experience data. However, an
addition to the mortality scaling factors of 2% has been applied, which reflects the expected long term negative outlook from the impact of
Covid-19 on future life expectancy. The estimated impact of the addition to the mortality scaling factors is approximately 0.5% decrease in
defined benefit obligation in respect of the schemes.
An adjustment to the base mortality tables has been made for the Premier Foods schemes to reflect the latest scheme mortality studies
which were commissioned by the trustee in 2021. The life expectancy assumptions are as follows:
At 2 Apr 2022 At 3 Apr 2021
Premier
Schemes
RHM
Schemes
Premier
Schemes
RHM
Schemes
Male pensioner, currently aged 65 86.6 85.2 87.2 85.4
Female pensioner, currently aged 65 88.3 87.7 89.4 87.8
Male non-pensioner, currently aged 45 87.5 86.5 87.8 86.6
Female non-pensioner, currently aged 45 89.8 89.3 90.4 89.4
A sensitivity analysis on the principal assumptions used to measure the scheme liabilities at the period end is as follows:
Change in assumption Impact on scheme liabilities
Discount rate Increase/decrease by 0.1% Decrease/increase by £65.9m/£66.9m
Inflation Increase/decrease by 0.1% Increase/decrease by £29.2m/£19.0m
Assumed life expectancy at age 60 (rate of mortality) Increase/decrease by 1 year Increase/decrease by £225.3m/£215.9m
The sensitivity information has been derived using projected cash flows for the Schemes valued using the relevant assumptions and
membership profile as at 2 April 2022. Extrapolation of these results beyond the sensitivity figures shown may not be appropriate.
Premier Foods plc
www.premierfoods.co.uk
 137
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
13. Retirement benefit schemes CONTINUED
Premier
Schemes
£m
% of total
%
RHM
Schemes
£m
% of total
%
Total
£m % of total
Assets with a quoted price in an
active market at 2 April 2022:
Government bonds 337.1 40.8 842.3 19.7 1,179.4 23.1
Cash 27.9 3.4 76.0 1.8 103.9 2.0
Assets without a quoted price in an
active market at 2 April 2022:
UK equities 0.1 0.0 0.3 0.0 0.4 0.0
Global equities 4.3 0.5 5.7 0.1 10.0 0.2
Government bonds 31.8 3.9 2.5 0.1 34.3 0.7
Corporate bonds 0.3 0.0 6.0 0.1 6.3 0.1
UK property 84.9 10.3 285.4 6.7 370.3 7.3
European property 38.3 4.6 168.3 3.9 206.6 4.0
Absolute return products 62.5 7.6 872.2 20.4 934.7 18.3
Infrastructure funds 26.7 3.2 338.0 7.9 364.7 7.2
Interest rate swaps 0.1 0.0 397.4 9.3 397.5 7.8
Inflation swaps – – 93.4 2.2 93.4 1.8
Private equity 39.9 4.8 280.1 6.5 320.0 6.3
LDI – – 7.7 0.2 7.7 0.2
Global credit 74.3 9.0 554.3 13.0 628.6 12.3
Illiquid credit 81.6 9.9 191.6 4.5 273.2 5.4
Cash 9.8 1.2 0.1 0.0 9.9 0.2
Other
1
6.7 0.8 152.4 3.6 159.1 3.1
Fair value of scheme assets
as at 2 April 2022 826.3 100% 4,273.7 100% 5,100.0 100%
Assets with a quoted price in an
active market at 3 April 2021:
Government bonds 45.1 5.7 1,527.7 34.3 1,572.8 29.9
Cash 14.8 1.9 64.9 1.5 79.7 1.5
Assets without a quoted price in an a
ctive market at 3 April 2021
2
:
UK equities 0.6 0.1 0.3 0.0 0.9 0.1
Global equities 8.1 1.0 5.9 0.1 14.0 0.3
Government bonds 34.3 4.3 18.3 0.4 52.6 1.0
Corporate bonds 1.0 0.1 – – 1.0 0.0
UK Property 84.6 10.7 278.8 6.2 363.4 6.9
European property 20.6 2.6 83.9 1.9 104.5 2.0
Absolute return products 228.2 28.8 883.9 19.8 1,112.1 21.1
Infrastructure funds 19.3 2.5 302.2 6.8 321.5 6.1
Interest rate swaps – – 464.2 10.4 464.2 8.8
Inflation swaps – – 21.2 0.5 21.2 0.4
Private equity 22.3 2.8 218.3 4.9 240.6 4.6
LDI 191.2 24.1 – – 191.2 3.6
Global credit 16.9 2.1 301.7 6.8 318.6 6.1
Illiquid credit 47.1 5.9 127.8 2.9 174.9 3.4
Cash 0.1 0.0 – – 0.1 0.0
Other
1
58.3 7.4 160.3 3.5 218.6 4.2
Fair value of scheme assets
as at 3 April 2021 792.5 100 4,459.4 100 5,251.9 100
1
Included in Other in the RHM Schemes is £111.2m (2020/21: £106.3m) of assets which were sold in the prior period and await settlement at the year-end date.
2
Updated to provide enhanced disclosure on the assets within the Other category.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 138
For assets without a quoted price in an active market fair value is determined with reference to net asset value statements provided by
third parties.
Where pensions asset valuations were not available at 31 March 2022, as is usual practice, valuations at 31 December 2021 have been
rolled forward for cash movements to end of March 2022 to estimate the valuations for these assets. This approach is principally relevant
for Infrastructure Funds, Private Equity, Absolute Return Products, Property Assets, Illiquid Credits and Global Credits. Management have
applied movements in the market indexes most comparable between 31 December 2021 and 1 April 2022 to project a valuation for assets
where the lagged value approach is to be taken. Pension asset valuations are therefore subject to estimation uncertainty due to market
volatility, which could result in a material movement in asset values over the next 12 months.
The amounts recognised in the balance sheet arising from the Group’s obligations in respect of its defined benefit schemes are as follows:
At 2 April 2022 At 3 April 2021
Premier
Schemes
£m
RHM
Schemes
£m
Total
£m
Premier
Schemes
£m
RHM
Schemes
£m
Total
£m
Present value of funded obligations (1,020.2) (3,134.9) (4,155.1) (1,175.1) (3,536.9) (4,712.0)
Fair value of scheme assets 826.3 4,273.7 5,100.0 792.5 4,459.4 5,251.9
(Deficit)/surplus in schemes (193.9) 1,138.8 944.9 (382.6) 922.5 539.9
The aggregate surplus of £539.9m has increased to a surplus of £944.9m in the current period. This increase of £405.0m (2020/21: £690.5m
decrease) is primarily due to changes in financial assumptions, being higher discount rate offset to a lesser extent by higher inflation
assumptions. Further details are provided later in this note.
The disclosures in note 13 represent those schemes that are associated with Premier (‘Premier schemes’) and those that are associated
with ex-RHM companies (‘RHM Schemes’). These differ to that disclosed on the balance sheet, in which the schemes have been split
between those in an asset position and those in a liability position. The disclosures in note 13 reconcile to those disclosed on the balance
sheet as shown below:
At 2 April 2022 At 3 April 2021
Premier
Schemes
£m
RHM
Schemes
£m
Total
£m
Premier
Schemes
£m
RHM
Schemes
£m
Total
£m
Schemes in net asset position 9.9 1,138.8 1,148.7 12.2 922.5 934.7
Schemes in net liability position (203.8) – (203.8) (394.8) – (394.8)
Net (Deficit)/surplus in schemes (193.9) 1,138.8 944.9 (382.6) 922.5 539.9
Changes in the present value of the defined benefit obligation were as follows:
Premier
Schemes
£m
RHM
Schemes
£m
Total
£m
Defined benefit obligation at 28 March 2020 (1,049.6) (3,240.0) (4,289.6)
Interest cost (22.8) (60.4) (83.2)
Past service cost (0.4) (2.5) (2.9)
Settlement 27.4 57.8 85.2
Remeasurement loss (171.6) (442.8) (614.4)
Exchange differences 2.6 1.5 4.1
Benefits paid 39.3 149.5 188.8
Defined benefit obligation at 3 April 2021 (1,175.1) (3,536.9) (4,712.0)
Interest cost (22.7) (68.9) (91.6)
Past service cost (0.1) (0.2) (0.3)
Settlement 0.2 – 0.2
Remeasurement gain 139.7 333.5 473.2
Exchange differences 0.5 0.2 0.7
Benefits paid 37.3 137.4 174.7
Defined benefit obligation at 2 April 2022 (1,020.2) (3,134.9) (4,155.1)
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FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
13. Retirement benefit schemes CONTINUED
Changes in the fair value of scheme assets were as follows:
Premier
Schemes
£m
RHM
Schemes
£m
Total
£m
Fair value of scheme assets at 28 March 2020 774.7 4,745.3 5,520.0
Interest income on scheme assets 16.2 81.4 97.6
Remeasurement gains/(losses) 16.7 (152.6) (135.9)
Administrative costs (6.8) (3.9) (10.7)
Settlement (18.1) (61.1) (79.2)
Contributions by employer 45.5 1.5 47.0
One-off contribution by employer
1
7.0 – 7.0
Exchange differences (3.4) (1.7) (5.1)
Benefits paid (39.3) (149.5) (188.8)
Fair value of scheme assets at 3 April 2021 792.5 4,459.4 5,251.9
Interest income on scheme assets 15.3 87.3 102.6
Remeasurement gains/(losses) 17.5 (133.4) (115.9)
Administrative costs (4.2) (2.5) (6.7)
Settlement (0.3) – (0.3)
Contributions by employer 40.9 0.5 41.4
Additional employer contribution
2
2.5 – 2.5
Exchange differences (0.6) (0.2) (0.8)
Benefits paid (37.3) (137.4) (174.7)
Fair value of scheme assets at 2 April 2022 826.3 4,273.7 5,100.0
1
One-off contribution by employer is related to Hovis disposal proceeds due to the Premier Schemes
2
Contribution by the Group to the Premier Schemes due to the payment of dividends during the year.
The reconciliation of the net defined benefit (deficit)/surplus over the period is as follows:
Premier
Schemes
£m
RHM
Schemes
£m
Total
£m
(Deficit)/surplus in schemes at 28 March 2020 (274.9) 1,505.3 1,230.4
Amount recognised in profit or loss (4.5) 11.3 6.8
Remeasurements recognised in other comprehensive income (154.9) (595.4) (750.3)
Contributions by employer 45.5 1.5 47.0
One-off contribution by employer 7.0 – 7.0
Exchange differences recognised in other comprehensive income (0.8) (0.2) (1.0)
(Deficit)/surplus in schemes at 3 April 2021 (382.6) 922.5 539.9
Amount recognised in profit or loss (11.8) 15.7 3.9
Remeasurements recognised in other comprehensive income 157.2 200.1 357.3
Contributions by employer 40.9 0.5 41.4
Additional employer contribution
1
2.5 – 2.5
Exchange differences recognised in other comprehensive income (0.1) – (0.1)
(Deficit)/surplus in schemes at 2 April 2022 (193.9) 1,138.8 944.9
1
Contribution by the Group to the Premier Schemes due to the payment of dividends during the year.
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Annual Report for the 52 weeks ended 2 April 2022
 140
Remeasurements recognised in the consolidated statement of comprehensive income are as follows:
2021/22 2020/21
Premier
Schemes
£m
RHM
Schemes
£m
Total
£m
Premier
Schemes
£m
RHM
Schemes
£m
Total
£m
Remeasurement gain/(loss) on scheme
liabilities 139.7 333.5 473.2 (171.6) (442.8) (614.4)
Remeasurement gain/(loss) on scheme assets 17.5 (133.4) (115.9) 16.7 (152.6) (135.9)
Net remeasurement gain/(loss) for the period 157.2 200.1 357.3 (154.9) (595.4) (750.3)
The actual return on scheme assets was a £13.3m loss (2020/21: £38.3m loss), which is £115.9m less (2020/21: £135.9m less) than the
interest income on scheme assets of £102.6m (2020/21: £97.6m).
The remeasurement gain on liabilities of £473.2m (2020/21: £614.4m loss) comprises a gain due to changes in financial assumptions
of £413.3m (2020/21: £575.1m loss), a loss due to member experience of £3.2m (2020/21: £6.7m gain) and a gain due to demographic
assumptions of £63.1m (2020/21: £46.0m loss).
The Group expects to contribute between £4m and £6m annually to its defined benefit schemes in relation to expenses and government
levies and £37-39m of additional annual contributions to fund the scheme deficits up to 2 April 2023.
The Group has concluded that it has an unconditional right to a refund of any surplus in the RHM Pension Scheme once the liabilities have
been discharged and, that the trustees of the RHM Pension Scheme do not have the unilateral right to wind up the scheme, so the asset has
not been restricted and no additional liability has been recognised.
The total amounts recognised in the consolidated statement of profit or loss are as follows:
2021/22 2020/21
Premier
Schemes
£m
RHM
Schemes
£m
Total
£m
Premier
Schemes
£m
RHM
Schemes
£m
Total
£m
Operating profit
Past service cost (0.1) (0.2) (0.3) (0.4) (2.5) (2.9)
Settlement (costs)/credits (0.1) – (0.1) 9.3 (3.3) 6.0
Administrative costs (4.2) (2.5) (6.7) (6.8) (3.9) (10.7)
Net interest (cost)/credit (7.4) 18.4 11.0 (6.6) 21.0 14.4
Total (cost)/credit (11.8) 15.7 3.9 (4.5) 11.3 6.8
Defined contribution schemes
A number of companies in the Group operate defined contribution schemes, including provisions to comply with auto enrolment
requirements laid down by law. In addition, a number of schemes providing life assurance benefits only are operated. The total expense
recognised in the statement of profit or loss of £8.0m (2020/21: £7.8m) represents contributions payable to the schemes by the Group at
rates specified in the rules of the schemes.
14. Stocks
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Raw materials 18.5 14.9
Work in progress 2.8 2.5
Finished goods and goods for resale 56.8 51.4
Total stocks 78.1 68.8
Stock write-offs in the period amounted to £3.7m (2020/21: £7.1m). The decrease in the current period is primarily related to one-off write-
offs in the prior period due to customers that primarily serve out of home sectors.
The borrowings of the Group are secured on the assets of the Group including inventories.
Premier Foods plc
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 141
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
15. Trade and other receivables
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Trade receivables 71.4 55.0
Trade receivables provided for (2.6) (3.5)
Net trade receivables 68.8 51.5
Prepayments 16.3 17.6
Other tax and social security receivable 11.2 13.9
Other receivables 0.2 0.4
Total trade and other receivables 96.5 83.4
The borrowings of the Group are secured on the assets of the Group including trade and other receivables.
During the period, the Group continued to operate the trade receivable purchase arrangement. This is a non-recourse arrangement and
therefore amounts are derecognised when sold. As at 2 April 2022, £28.5 million was drawn (2020/21: £27.7 million) under the non-
recourse arrangement.
16. Notes to the cash flow statement
Reconciliation of profit before tax to cash flows from operations
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Profit before taxation 102.6 122.8
Net finance cost 28.5 29.8
Operating profit 131.1 152.6
Depreciation of property, plant and equipment 19.2 19.1
Amortisation of intangible assets 27.0 30.4
Loss on disposal of non-current assets 0.7 0.4
Impairment of tangible assets – 0.3
Impairment of intangible assets – 0.1
Fair value movements on foreign exchange and other derivative contracts (4.4) 2.3
Reversal of impairment losses on financial assets
1
– (15.7)
Profit on disposal of investment in associate
1
– (16.9)
Equity settled employee incentive schemes 3.4 3.1
GMP equalisation and past service cost related to defined benefit pension schemes 0.3 2.9
Increase in inventories (9.3) (0.8)
(Increase) / Decrease in trade and other receivables (13.1) 5.7
Increase / (Decrease) in trade and other payables and provisions 4.1 (1.6)
Additional employer contribution
2
(2.5) –
Movement in retirement benefit obligations (45.6) (63.7)
Cash generated from operations 110.9 118.2
1
On 5 November 2020, the Group completed the sale of its interest in Hovis to Endless LLP. As part of the sale, the group received a total consideration of £37.3m, of which
£16.9m was in respect of equity and £20.4m reflected the settlement of the outstanding loan to associate including interest of £4.7m.
2
Contribution by the Group to the Premier schemes due to the payment of dividends during the year.
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Annual Report for the 52 weeks ended 2 April 2022
 142
Reconciliation of cash and cash equivalents to net borrowings
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Net inflow / (outflow) of cash and cash equivalents 53.2 (176.8)
Movement in lease liabilities 2.5 2.9
(Increase) / decrease in borrowings (10.0) 275.0
Debt issuance costs in the period 8.5 –
Other non-cash movements (6.5) (4.2)
Decrease in borrowings net of cash 47.7 96.9
Total net borrowings at beginning of period (332.7) (429.6)
Total net borrowings at end of period (285.0) (332.7)
Analysis of movement in borrowings
As at
3 Apr 2021
£m
Cash flows
£m
Non-cash
interest
expense
£m
Other
non-cash
movements
£m
As at
2 Apr 2022
£m
Bank overdrafts (3.1) 3.1 – – –
Cash and bank deposits 4.2 50.1 – – 54.3
Net cash and cash equivalents 1.1 53.2 – – 54.3
Borrowings – Senior Secured Fixed Rate Notes maturing
October 2023 (300.0) 300.0 – – –
Borrowings – Senior Secured Fixed Rate Notes maturing
October 2026 – (330.0) – – (330.0)
Borrowings – Senior Secured Floating Rate Notes maturing
July 2022 (20.0) 20.0 – – –
Lease liabilities (18.6) 3.3 (0.7) (0.1) (16.1)
Gross borrowings net of cash
1
(337.5) 46.5 (0.7) (0.1) (291.8)
Debt issuance costs
2
4.8 8.5 – (6.5) 6.8
Total net borrowings
1
(332.7) 55.0 (0.7) (6.6) (285.0)
Total net borrowings excluding lease liabilities
1
(314.1) 51.7 – (6.5) (268.9)
1
Borrowing exclude derivative financial instruments.
2
The non-cash movement in debt issuance costs relates to the amortisation of capitalised borrowing costs only.
The Group has the following cash pooling arrangements in sterling, euros and US dollars, where both the Group and the bank have a legal
right of offset.
As at 2 Apr 2022 As at 3 Apr 2021
Offset
asset
Offset
liability
Net offset
asset
Offset
asset
Offset
liability
Net offset
asset
Cash, cash equivalents and bank overdrafts 8.1 0.0 8.1 138.2 (141.3) (3.1)
Premier Foods plc
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 143
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
17. Trade and other payables
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Trade payables (137.4) (126.1)
Commercial accruals (75.1) (75.5)
Tax and social security payables (6.6) (6.0)
Other payables and accruals (34.9) (42.2)
Total trade and other payables (254.0) (249.8)
18. Financial instruments
The Group’s activities expose it to a variety of financial risks: market risk (arising from adverse movements in foreign currency, commodity
prices and interest rates), credit risk and liquidity risk. The Group uses a variety of derivative financial instruments to manage certain
of these risks. The management of these risks, along with the day-to-day management of treasury activities is performed by the Group
Finance function. The policy framework governing the management of these risks is defined by the Board. The framework for management
of these risks is incorporated into a policies and procedures manual.
The Group also enters into contracts with suppliers for its principal raw material requirements, some of which are considered commodities,
diesel and energy. These commodity and energy contracts are part of the Group’s normal purchasing activities. Some of the risk relating to
diesel is mitigated with the use of derivative financial instruments. The Treasury Risk Management Committee monitors and reviews the
Group’s foreign currency exchange, commodity price and energy price exposures and recommends appropriate hedging strategies for each.
18.1 Market risk
(i) Foreign exchange risk
The Group’s main operating entities’ functional currency and the Group’s presentational currency is sterling although some transactions
are executed in non-sterling currencies, principally the euro. The transactional amounts realised or settled are therefore subject to the
effect of movements in these currencies against sterling. Management of these exposures is centralised and managed by the Group Finance
function. It is the Group’s policy to manage the exposures arising using forward foreign currency exchange contracts and currency options.
Hedge accounting is not sought for these transactions.
The Group generates some of its profits in non-sterling currencies and has assets in non-sterling jurisdictions, principally the euro.
The principal foreign currency affecting the translation of subsidiary undertakings within the Group financial statements is the euro. The
rates applicable are as follows:
Principal rate of exchange: euro/sterling
52 weeks
ended
2 April 2022
53 weeks
ended
3 April 2021
Period ended 1.1881 1.1740
Average 1.1774 1.1215
The majority of the Group’s assets and liabilities are denominated in the functional currency of the relevant subsidiary.
The table below shows the Group’s currency exposures as at 2 April 2022 and 3 April 2021 that gave rise to net currency gains and losses
recognised in the consolidated statement of profit or loss as a result of monetary assets and liabilities that are not denominated in the
functional currency of the subsidiaries involved.
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Net foreign currency monetary assets:
– Euro (4.9) (3.4)
– US dollar 1.6 1.1
– Other (0.2) (0.1)
Total (3.5) (2.4)
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Annual Report for the 52 weeks ended 2 April 2022
 144
In addition, the Group also has forward foreign currency exchange contracts outstanding at the period end in order to manage the
exposures above but also to hedge future transactions in foreign currencies. The sterling nominal amounts outstanding are as follows:
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Euro (50.5) (50.3)
Total (50.5) (50.3)
Sensitivities are disclosed below using the following reasonably possible scenarios:
If the US dollar were to weaken against sterling by 20 US dollar cents, with all other variables held constant, profit after tax would decrease
by £0.2m (2020/21: £0.1m decrease).
If the US dollar were to strengthen against sterling by 20 US dollar cents, with all other variables held constant, profit after tax would
increase by £0.2m (2020/21: £0.2m increase).
If the euro were to weaken against sterling by 10 euro cents, with all other variables held constant, profit after tax would decrease by £3.5m
(2020/21: £3.0m decrease).
If the euro were to strengthen against sterling by 10 euro cents, with all other variables held constant, profit after tax would increase by
£4.1m (2020/21: £3.6m increase).
(ii) Commodity price risk
The Group purchases a variety of commodities for use in production and distribution which can experience significant price volatility, which
include, inter-alia, dairy, wheat, cocoa, edible oils and energy. The price risk including inflation on these commodities is managed closely by
the Group through the Treasury Risk Management Committee. It is the Group’s policy to minimise its exposure to this volatility by adopting
an appropriate forward purchase strategy or by the use of derivative instruments where they are available.
(iii) Interest rate risk
The Group’s borrowing facilities comprise senior secured notes and a revolving facility, in sterling. Interest on the revolving facility is
charged at floating rates plus a margin on the amounts drawn down, and at 35% of the applicable margin for the non-utilised portion of the
facility, hence the borrowings are sensitive to changes in interest rates.
Cash and deposits earn interest at floating rates based on banks’ short-term treasury deposit rates. Short-term trade and other receivables
are interest-free.
The Group’s other financial assets and liabilities are not exposed to material interest rate risk.
18.2 Credit risk
The Group’s principal financial assets are cash and cash equivalents and trade and other receivables.
Cash and cash equivalents are deposited with high-credit quality financial institutions and although a significant amount of sales is to a
relatively small number of customers these are generally the major grocery retailers whose credit risk is considered low.
The ageing of trade and other receivables was as follows:
At 2 April 2022
Past due
Fully
performing
£m
1-30 days
£m
31-60 days
£m
61-90 days
£m
91-120 days
£m
120+ days
£m
Total
£m
Trade and other receivables
Expected loss rate 3.0% 5.9% 0.0% 1.1% 14.8% 37.4% 3.7%
Gross carrying amount trade
and other receivables 63.9 4.1 0.0 2.2 0.4 1.0 71.6
Loss allowance (1.9) (0.2) (0.0) (0.0) (0.1) (0.4) (2.6)
At 3 April 2021
Trade and other receivables
Expected loss rate 2.9% 12.0% 11.0% 1.8% 13.9% 41.7% 6.3%
Gross carrying amount trade
and other receivables 47.0 2.0 0.9 1.0 0.5 4.0 55.4
Loss allowance (1.4) (0.2) (0.1) (0.0) (0.1) (1.7) (3.5)
Premier Foods plc
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 145
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
18. Financial instruments CONTINUED
The total loss allowance includes provisions in relation to receivables from customers which are considered to be experiencing difficult
economic situations.
The Group does not hold any collateral as security against its financial assets.
Movements in the provision for impairment of trade receivables are as follows:
2021/22
£m
2020/21
£m
As at 3 April 2021 / 28 March 2020 3.5 3.2
Receivables written off during the period as uncollectable (0.5) (0.8)
Provision for receivables impairment (released)/raised (0.4) 1.1
As at 2 April 2022 / 3 April 2021 2.6 3.5
18.3 Liquidity risk
The Group manages liquidity risk through the Group Finance function. Cash flow forecasts are prepared and reviewed on a weekly basis,
normally covering a period of three months.
In addition, cash flow forecasts are prepared as part of the Group’s overall budgeting and forecasting processes and performance is
monitored against this each month. This is intended to give the Board sufficient forward visibility of debt levels.
The Group’s Net debt level can vary from month to month and there is some volatility within months. This reflects seasonal trading
patterns, timing of receipts from customers and payments to suppliers, patterns of inventory holdings and the timing of the spend on major
capital and restructuring projects. For these reasons the debt levels at the period end date may not be indicative of debt levels at other
points throughout the period.
The following table analyses the Group’s financial liabilities into relevant maturity groupings based on the contractual undiscounted
cash flows.
Within 1
year
£m
1 and 2
years
£m
2 and 3
years
£m
3 and 4
years
£m
Total
£m
At 2 April 2022
Trade and other payables (247.4) – – – (247.4)
Senior secured notes – fixed (11.6) (11.6) (11.6) (336.7) (371.5)
At 3 April 2021
Trade and other payables (243.8) – – – (243.8)
Senior secured notes – fixed (18.8) (18.8) (310.9) – (348.5)
Senior secured notes – floating (1.0) (20.3) – – (21.3)
The secured senior credit facility (revolving) is priced to SONIA, other liabilities are not re-priced before the maturity date.
At 2 April 2022, the Group had £182.0m (2020/21: £158.5m) of facilities not drawn, expiring between two to four years (2020/21: one to
two years).
The borrowings are secured by a fixed and floating charge over all the assets of the Group.
The following table analyses the contractual undiscounted cash flows of interest on the fixed and floating rate debt to maturity. Floating
rate is based on the indicative 1 month SONIA 0.7607% (2020/21: last fixed rate reset based on LIBOR of 0.08325%) plus applicable margin.
Within 1
year
£m
1 and 2
years
£m
2 and 3
years
£m
3 and 4
years
£m
4 and 5
years
£m
Over 5
years
£m
Total
£m
At 2 April 2022 11.6 11.6 11.6 6.7 – – 41.5
At 3 April 2021 19.8 19.1 10.9 – – – 49.8
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Annual Report for the 52 weeks ended 2 April 2022
 146
The following table analyses the Group’s derivative financial instruments into relevant maturity groupings based on the remaining period at
the balance sheet date to the contractual maturity date. The amounts disclosed are the undiscounted cash flows.
Within 1
year
£m
1 and 2
years
£m
2 and 3
years
£m
3 and 4
years
£m
4 and 5
years
£m
Over 5
years
£m
Total
£m
At 2 April 2022
Forward foreign exchange
contracts:
– Outflow (52.2) – – – – – (52.2)
– Inflow 51.7 – – – – – 51.7
Commodities:
– Outflow (2.5) (0.3) – – – – (2.8)
Total derivative financial
instruments (3.0) (0.3) – – – – (3.3)
At 3 April 2021
Forward foreign exchange
contracts:
– Outflow (50.2) – – – – – (50.2)
– Inflow 47.9 – – – – – 47.9
Commodities:
– Outflow (2.6) (1.6) – – – – (4.2)
Total derivative financial
instruments (4.9) (1.6) – – – – (6.5)
18.4 Fair value
The following table shows the carrying amounts (which approximate to fair value except as noted below) of the Group’s financial assets
and financial liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Set out below is a summary of methods and assumptions used to value each
category of financial instrument.
As at 2 April 2022 As at 3 April 2021
Carrying
amount
£m
Fair
value
£m
Carrying
amount
£m
Fair
value
£m
Financial assets not measured at fair value:
Cash and cash equivalents 54.3 54.3 4.2 4.2
Financial assets at amortised cost:
Trade and other receivables 65.7 65.7 49.4 49.4
Financial assets at fair value through profit or loss:
Trade and other receivables 3.3 3.3 2.5 2.5
Derivative financial instruments
– Forward foreign currency exchange contracts 0.1 0.1 – –
– Commodity and energy derivatives 2.3 2.3 0.1 0.1
Financial liabilities at fair value through profit or loss:
Derivative financial instruments
– Forward foreign currency exchange contracts (0.3) (0.3) (2.3) (2.3)
Financial liabilities at amortised cost:
Trade and other payables (247.4) (247.4) (243.8) (243.8)
Senior secured notes (330.0) (305.8) (320.0) (326.6)
Bank overdraft – – (3.1) (3.1)
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 147
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
18. Financial instruments CONTINUED
The following table presents the Group’s assets and liabilities that are measured at fair value using the following fair value measurement
hierarchy:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices) (level 2).
• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
As at 2 April 2022 As at 3 April 2021
Level 1
£m
Level 2
£m
Level 1
£m
Level 2
£m
Financial assets at fair value through profit or loss:
Derivative financial instruments
– Forward foreign currency exchange contracts – 0.1 – –
– Commodity and energy derivatives – 2.3 – 0.1
Financial liabilities at fair value through profit or loss:
Derivative financial instruments
– Forward foreign currency exchange contracts – (0.3) – (2.3)
Financial liabilities at amortised cost:
Senior secured notes (305.8) – (326.6) –
Fair value estimation
Derivatives
Forward exchange contracts are marked to market using prevailing market prices. Hedge accounting has not been applied to forward
contracts and as a result the movement in the fair value of £2.2m has been credited to the statement of profit or loss in the period
(2020/21: £3.3m charge).
Commodity derivatives are marked to market using prevailing prices and are also not designated for hedge accounting. As a result, the fair
value movement of £2.2m has been credited to the statement of profit or loss (2020/21: £1.0m credit).
Short and long-term borrowings, loan notes and interest payable
Fair value is calculated based on discounted expected future principal and interest rate cash flows. The fair value of the floating rate debt
approximates the carrying value above.
Trade and other receivables/payables
The carrying value of receivables/payables with a remaining life of less than one year is deemed to reflect the fair value given their short
maturity. The fair values of non-current receivables/payables are also considered to be the same as the carrying value due to the size and
nature of the balances involved.
18.5 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares, or sell assets to
reduce debt.
The directors propose final dividend of 1.2 pence per share for the period ended 2 April 2022 (2020/21: 1.0 pence).
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt
divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as equity plus
net debt.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 148
The gearing ratios at the balance sheet date were as follows:
As at
2 Apr 2021
£m
As at
3 Apr 2021
£m
Total borrowings (339.3) (336.9)
Less cash and bank deposits 54.3 4.2
Net debt (285.0) (332.7)
Total equity (1,506.9) (1,183.6)
Total capital (1,791.9) (1,516.3)
Gearing ratio 16% 22%
Gearing is lower year-on-year due to increased cash deposits.
Under the Group’s financing arrangement, the Group is required to meet two covenant tests which are calculated and tested on a 12-month
rolling basis at the half year and full year, each year. The Group has complied with these tests at 2 October 2021 and 2 April 2022.
18.6 Financial compliance risk
Risk
The Group continues to operate with a high level of Net debt of £285.0m (2020/21: £332.7m) and is subject to operating within banking
covenants set out in its refinancing agreement agreed with its banking syndicate, which include Net debt/EBITDA and EBITDA/interest
covenant tests. In the event these covenants are not met then the Group would be in breach of its financing agreement and, as would be
the case in any covenant breach, the banking syndicate could withdraw their funding to the Group. The banking covenants relate to the
Group’s revolving credit facility, which was undrawn at 2 April 2022 (2020/21: undrawn).
In addition to covenant compliance the Group must ensure that it manages its liquidity such that it has sufficient funds to meet its
obligations as they fall due.
It also supports three defined benefit pension schemes in the UK, which are set up as sections of the RHM Pension Scheme. Two of the
three sections have significant technical funding deficits, which could have an adverse impact on the financial condition of the Group.
Mitigation
The Group has financing arrangements which provide funding until between 2024 and 2026. On 18 May 2022, the Group announced that it
had extended the period of its revolving credit facility (RCF) by one year to May 2025 with the same lending group. See note 28 for further
details.
The Group reviews its performance on an ongoing basis and formally tests and reports on covenant compliance to the Group’s banking
syndicate at each reporting date. In the event of a forecast covenant breach the Group would seek a covenant waiver or amendment from
its banking syndicate.
The Group manages liquidity risk through the Group Finance function. Cash flow forecasts are prepared and reviewed on a weekly basis,
normally covering a period of three months. In addition, cash flow forecasts are prepared as part of the Group’s overall budgeting and
forecasting processes and performance is monitored against this each month.
The Group continues to monitor the pension risks closely, working with the trustee to ensure a collaborative approach.
Premier Foods plc
www.premierfoods.co.uk
 149
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
19. Bank and other borrowings
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Current:
Bank overdrafts – (3.1)
Lease liabilities (2.1) (2.3)
Total borrowings due within one year (2.1) (5.4)
Non-current:
Lease liabilities (14.0) (16.3)
(14.0) (16.3)
Transaction costs
1
6.8 4.8
6.8 4.8
Senior secured notes (330.0) (320.0)
(330.0) (320.0)
Total borrowings due after more than one year (337.2) (331.5)
Total bank and other borrowings (339.3) (336.9)
1
Included in transaction costs is £1.9m (2020/21: £2.6m) relating to the revolving credit facility.
Secured senior credit facility – revolving
During the period, the Group entered into a new revolving credit facility (RCF) with an updated lending group for a period of three years
from May 2021 with the option of extending for up to two additional years, which led to a write off of previously capitalised transaction
fees of £2.3m. The RCF of £175m attracts a leverage-based margin of between 2.0% and 4.0% above SONIA. Banking covenants of net debt
/ EBITDA and EBITDA / interest are in place and are tested biannually.
The covenant package attached to the revolving credit facility is:
Net debt /
EBITDA
1
Net debt /
Interest
1
2021/22 FY 3.5x 3.00x
2022/23 FY 3.5x 3.00x
1
Net debt, EBITDA and interest are as defined under the revolving credit facility.
On 18 May 2022, the Group announced that it had extended the period of its revolving credit facility (RCF) by one year to May 2025 with
the same lending group. See note 28 for further details.
Senior secured notes
During the period, the Group issued new Senior Secured Fixed Rate Notes maturing October 2026. The senior secured notes are listed on
the Irish GEM Stock Exchange. The notes totalling £330m mature in October 2026 and attract an interest rate of 3.5%. The gross proceeds
were used to redeem £300m Senior Secured Fixed Rate Notes maturing October 2023, which led to the write off of previously capitalised
transaction fees of £1.9m and an early redemption fee of £4.7m.
During the period, the Group also redeemed the remaining £20m Senior Secured Floating Rate Notes maturing July 2022. This redemption
led to the write off of previously capitalised transaction fees of £0.1m.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 150
Lease liabilities
The following table analyses the Group’s lease liabilities into relevant maturity groupings based on the contractual undiscounted cash flows.
Within 1
year
£m
1 and 2
years
£m
2 and 3
years
£m
3 and 4
years
£m
4 and 5
years
£m
Over 5
years
£m
Total
£m
At 2 April 2022
Lease liabilities (2.9) (2.6) (2.5) (2.2) (1.5) (19.1) (30.8)
At 3 April 2021
Lease liabilities (3.2) (2.8) (2.5) (2.4) (2.2) (20.6) (33.7)
Cash outflows of £3.3m (2020/21: £2.7m) in relation to repayments of lease liabilities have been included in the consolidated statement of
cash flows.
20. Provisions for liabilities and charges
Property
£m
Other
£m
Total
£m
At 28 March 2020 (8.0) (8.0) (16.0)
Utilised during the period – 0.9 0.9
Additional charge in the period (1.3) (0.6) (1.9)
Reclassification – (0.3) (0.3)
Unwind of discount 1.1 – 1.1
Released during the period – 1.6 1.6
At 3 April 2021 (8.2) (6.4) (14.6)
Utilised during the period 0.4 1.2 1.6
Additional charge in the period (1.0) – (1.0)
Unwind of discount 0.9 – 0.9
Released during the period – 2.5 2.5
At 2 April 2022 (7.9) (2.7) (10.6)
Property provisions primarily relate to provisions for dilapidations against leasehold properties and environmental liabilities. Other
provisions primarily relate to insurance and legal matters and provisions for restructuring costs. These provisions have been discounted
at rates between 1.37% and 1.73% (2020/21: 0.07% and 1.34%). The unwinding of the discount is charged or credited to the statement of
profit or loss under finance cost.
Ageing of total provisions
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Within one year (2.3) (6.2)
Between 2 and 5 years (2.9) (3.3)
After 5 years (5.4) (5.1)
Total (10.6) (14.6)
21. Other liabilities
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Deferred income (5.7) (6.4)
Other accruals – (0.7)
Other liabilities (5.7) (7.1)
Deferred income relates to amounts received in relation to a previously disposed business.
Premier Foods plc
www.premierfoods.co.uk
 151
FINANCIAL STATEMENTS
Notes to the financial statements CONTINUED
22. Reserves and share capital
Share premium
The share premium reserve comprises the premium paid over the nominal value of shares for shares issued.
Merger reserve
The merger reserve comprises the non-statutory premium arising on shares issued as consideration for acquisition of subsidiaries where
merger relief applies, less subsequent realised losses relating to those acquisitions.
Other reserves
Other reserves comprise the hedging reserve, which represents the effective portion of the gains or losses on derivative financial
instruments that have historically been designated as hedges.
Profit and loss reserve
The profit and loss reserve represents the cumulative profit or loss and the own shares reserve which represents the cost of shares in
Premier Foods plc, purchased in the market and held by the Employee Benefit Trust on behalf of the Company in order to satisfy options
and awards under the Company’s incentive schemes. 2,989,069 shares in Premier Foods plc were held by the Employee Benefit Trust at 2
April 2022, with a market value of £3.5m (2020/21: 1,230,629 shares with a market value of £1.2m).
Share capital
Number of
shares
Ordinary
shares @
nominal
value (£0.10/
share)
£m
Share
premium
£m
Total
£m
At 28 March 2020 848,209,480 84.8 1,409.4 1,494.2
Shares issued under share schemes 6,917,325 0.7 1.0 1.7
Capital reduction – – (1,409.8) (1,409.8)
At 3 April 2021 855,126,805 85.5 0.6 86.1
Shares issued under share schemes 7,658,472 0.8 0.9 1.7
At 2 April 2022 862,785,277 86.3 1.5 87.8
Share award schemes
The Company’s share award schemes are summarised as follows:
1. A Long-Term Incentive Plan (‘LTIP’) for executive directors and senior managers, approved by shareholders in 2011 and a 10 year LTIP
approved by shareholders in 2021. The LTIP is comprised of performance shares whereby participants have the right to subscribe for
ordinary shares at nil cost. These awards are equity-settled and have a maximum term of three years. The vesting of the 2019, 2020 and
2021 Performance Share awards are conditional on achievement of a combination of absolute adjusted earnings per share targets (1/3)
and relative TSR targets (2/3). During the period the EPS and TSR elements of the 2018 LTIP vested in full. The EPS and TSR targets for
the 2019 LTIP award have been achieved which will result in full vesting in August 2022.
2. A Restricted Stock Plan (‘RSP’) which provides specific ad hoc share awards to managers. Awards are normally subject only to
continued employment and may be equity-settled or cash-settled and normally have a retention term of two to three years for senior
management.
3. A Share Incentive Plan (‘SIP’) for all employees. An award of free shares was made to all employees in 2014 by the Company under
this HMRC tax-advantaged plan. Free shares are held by a trustee for a minimum of three years. Subject to continuing employment,
participants may elect to remove shares from the trust after this three-year holding period, however, there are tax and National
Insurance advantages for the employee should the shares be left in the trust for over five years. No further awards under this plan are
currently anticipated.
4. A Deferred Bonus Plan (‘DBP’). One third of any annual bonus payment awarded to executive directors is made in the form of shares.
These shares are awarded under the terms of the DBP which was approved by shareholders in July 2017. Awards will normally be
made within six weeks following the announcement of the Group’s full year results in the form of nil cost options. The awards will
normally vest on the third anniversary of grant and, if awarded in the form of nil cost options, will then be exercisable up until the tenth
anniversary of grant.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 152
Details of the share awards during the period are as follows:
At 2 April 2022, the maximum number of shares which could be awarded under the Group’s Long-Term Incentive Plan schemes was
16,995,294 (2020/21: 18,794,893), of which 4,309,124 (2020/21: 858,067) had vested and were exercisable at the end of the period. During
the period, conditional share awards were granted for 2,389,841 (2020/21: 5,129,025) shares and rights to 3,862,637 (2020/21: 6,297,633)
shares lapsed or were forfeited.
At 2 April 2022, the maximum number of shares which could be awarded under the Group’s Restricted Stock Plan schemes was 248,907
(2020/21: 1,500), of which 1,500 (2020/21: 1,500) had vested and were exercisable at the end of the period. During the period, awards
were granted for 247,407 shares (2020/21: nil) and rights to nil (2020/21: 67,042) shares were transferred or sold.
At 2 April 2022, the number of shares outstanding under the Group’s Share Incentive Plan was 426,157 (2020/21: 515,613), of which
426,157 (2020/21: 515,613) were exercisable at the end of the period. During the period, no (2020/21: no awards) awards were granted
and rights to 80,456 (2020/21: 397,188) shares were exercised.
At 2 April 2022, the number of shares outstanding under the Group’s Deferred Bonus Plan schemes was 674,752 (2020/21: 816,231), of
which nil (2020/21: nil) had vested and were exercisable at the end of the period. During the period, awards were granted for 282,377
(2020/21: 172,543) shares and rights to 423,856 (2020/21: nil) shares were transferred or sold.
Share option schemes
The Company’s share option schemes are summarised as follows:
A Savings Related Share Option Scheme (‘Sharesave Plan’) for all employees. The employees involved in this HMRC tax-advantaged save as
you earn scheme have the right to subscribe for up to 18.8 million ordinary shares. The number of shares subject to options, the periods
in which they were granted and the periods in which they may be exercised are given below. These options are equity-settled, have a
maximum term of 3.5 years and generally vest only if employees remain in employment to the vesting date.
At 2 April 2022, the number of shares outstanding under the Group’s Sharesave Plan was 13,779,775 with a weighted average exercise price
at the date of exercise of 56p (2020/21: 15,585,674 shares, 43p), including 574,680 shares which had vested and were exercisable at the
end of the period with a weighted average exercise price of 31p (2020/21: 865,135 shares, 33p). The options outstanding at the end of the
period had a range of exercise prices from 29p to 83p (2020/21: 29p to 72p) and a weighted average life of 1.6 years (2020/21: 1.8 years).
During the period, options were granted under the Sharesave Plan for 3,296,388 shares with a weighted average exercise price at the date
of exercise of 83p (2020/21: 4,867,531 shares, 72p). During the period options were exercised for 4,158,472 shares with a weighted average
exercise price of 31p (2020/21: 4,417,325 shares, 34p) and options for 943,835 shares with a weighted average exercise price of 50p lapsed
or were forfeited (2020/21: 1,252,029 shares, 33p).
The Group uses the Black-Scholes model to determine the fair value of share options at grant dates offered under the Sharesave plan. Fair
values determined from the model use assumptions that are revised for each share-based payment arrangement.
The expected Premier Foods plc share price volatility was determined using an average for food producers as at the date of grant. Current
dividend yield and risk-free rate determined from market yield curves for government gilts with outstanding terms equal to the average
expected term to exercise for each relevant grant.
In 2021/22, the Group recognised an expense of £3.4m (2020/21: £3.1m), related to all equity-settled share-based payment transactions.
23. Dividends
The following dividends were declared and paid during the period:
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Ordinary final of 1.0 pence per ordinary share (2020/21: nil) paid 30 July 2021 8.5 –
After the balance sheet date, a final dividend for 2021/22 of 1.2 pence per qualifying ordinary share (2020/21: 1.0 pence) was proposed
for approval at the Annual General Meeting on 20 July 2022 and will be payable on 29 July 2022. Dividend distributions are recognised as a
liability in the period in which the dividends are approved by Group’s shareholders.
Premier Foods plc
www.premierfoods.co.uk
 153
FINANCIAL STATEMENTS
24. Capital commitments
The Group has capital expenditure on property, plant and equipment contracted for at the end of the reporting period but not yet incurred
at 2 April 2022 of £5.7m (2020/21: £6.3m).
25. Contingencies
There were no material contingent liabilities at 2 April 2022 (2020/21: none).
26. Related party transactions
The following transactions were carried out with related parties:
26.1 Key management compensation
Key management personnel of the Group are considered to be the executive and non-executive directors and the Executive Leadership
Team. Details of their remuneration are set out below in aggregate for each of the categories specified in IAS 24 ‘Related Party Disclosures’.
Further information about the remuneration of individual directors is provided in the audited section of the Directors’ Remuneration Report
on pages 79 to 95.
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Short-term employee benefits 5.5 4.8
Share-based payments 3.2 2.1
Total 8.7 6.9
26.2 Other related parties
As at 2 April 2022 the following are also considered to be related parties under the Listing Rules due to their shareholdings exceeding 10%
of the Group’s total issued share capital:
• Nissin Foods Holding Co., Ltd. (‘Nissin’) is considered to be a related party by virtue of its 19.06% (2020/21: 19.24%) equity shareholding
in Premier Foods plc and its right to appoint a member to the Board of directors.
Transactions with related parties
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Sale of services:
– Hovis – 0.4
– Nissin 0.2 –
Total sales 0.2 0.4
Purchase of goods:
– Nissin 18.7 16.4
Total purchases 18.7 16.4
26.3 Retirement benefit obligations
As stated in note 13, the Group has entered into an arrangement with the Pension Scheme Trustees as part of the funding requirements for
any actuarial deficit in the Scheme. Full details of this arrangement are set out in note 13 to these financial statements.
Notes to the financial statements CONTINUED
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 154
27. Investments
In accordance with Section 409 of the Companies Act 2006 and The Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008, as amended by The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015, a full list
of subsidiary undertakings, associate undertakings and joint operations (showing the country of incorporation, registered address and
effective percentage of equity shares held) as at 2 April 2022 is disclosed below.
Company
% Held
by Parent
Company of
the Group
% Held
by Group
companies, if
different Share Class Country
Registered
Address
Premier Foods Investments No.1 Limited 100% 100% £1.00 Ordinary shares England &
Wales
Premier House
Griffiths Way
St Albans
Hertfordshire
AL1 2RE
Premier Foods Investments Limited 100% 100% £1.00 Ordinary shares
Premier Foods Finance plc 0% 100% £1.00 Ordinary shares
RHM Limited 0% 100% £0.001 Ordinary shares
RHM Group Holding Limited 0% 100% £0.10 Ordinary shares
RHM Group Two Limited 0% 100% £0.01 Ordinary shares
RHM Group Three Limited 0% 100% £0.01 Ordinary shares
Premier Foods Group Services Limited 0% 100% £0.01 Ordinary shares
Premier Foods Group Limited 0% 100% £0.25 Ordinary shares
Centura Foods Limited 0% 100% £1.00 Ordinary shares
Premier Foods (Holdings) Limited 0% 100% £1.00 Ordinary shares
H.L. Foods Limited 0% 100% £1.00 Ordinary shares
Hillsdown Europe Limited 0% 100% £1.00 Ordinary shares
Premier Financing Limited 0% 100% £1.00 Ordinary shares
CH Old Co Limited 0% 100% £1.00 Ordinary shares
Hillsdown International Limited 0% 100% £1.00 Ordinary shares
Premier International Foods UK Limited* 0% 100% £1.00 Ordinary shares
RH Oldco Limited* 0% 100% £1.00 Ordinary shares
RHM Frozen Foods Limited 0% 100% £1.00 Ordinary shares
RHM Overseas Limited 0% 100% £1.00 Ordinary shares
Knighton Foods Investments Limited*
Knighton Foods Limited
Knighton Foods Properties Limited
0%
0%
0%
100%
100%
100%
£1.00 Ordinary shares
£1.00 Ordinary shares
£1.00 Ordinary shares
£1.00 Ordinary shares
W & J B Eastwood Limited** 0% 100% £1.00 Ordinary A shares
£1.00 Ordinary B shares
Vic Hallam Holdings Limited** 0% 100% £0.25 Ordinary shares
£1.00 redeemable cumulative
preference shares
DFL Oldco Limited** 0% 100% £1.00 Ordinary shares
F.M.C. (Meat) Limited** 0% 100% £0.25 Ordinary shares
Haywards Foods Limited** 0% 100% £1.00 Ordinary shares
RLP Old Co Limited** 0% 100% £1.00 Ordinary shares
Hillsdown Holdings Pension Trustees Limited* 0% 100% £1.00 Ordinary shares
Premier Foods Group Life Plan Trustees Limited* 0% 100% £1.00 Ordinary shares
Premier Foods Pension Scheme Trustees
Limited*
0% 100% £1.00 Ordinary shares
RHM Pension Trust Limited* 0% 100% £1.00 Ordinary shares
Winsford Bacon Company Limited* 0% 100% £1.00 Ordinary shares
The Specialist Soup Company Limited** 0% 100% £1.00 Ordinary shares
Tiffany Sharwood’s Frozen Foods Limited** 0% 100% £1.00 Ordinary shares
James Robertson & Sons Limited** 0% 100% £1.00 Ordinary shares
00241018 Limited (formerly British Bakeries)** 0% 100% £1.00 Ordinary shares
Daltonmoor Limited** 0% 100% £1.00 Ordinary shares
PFF Old Co Limited ** 0% 100% £1.00 Ordinary shares
RFB Old Co Limited** 0% 100% £1.00 Ordinary shares
Premier Foods plc
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 155
FINANCIAL STATEMENTS
Company
% Held
by Parent
Company of
the Group
% Held
by Group
companies, if
different Share Class Country
Registered
Address
Citadel Insurance Company Limited 0% 100% £1.00 Ordinary Shares Isle of Man Ioma House
Hope Street
Douglas
Isle of Man
IM1 1AP
Woolgate Nitrovit Limited** 0% 100% £0.25 Ordinary shares England &
Wales
2 Woolgate
Court St
Benedicts
Street
Norwich
Norfolk
NR2 4AP
Diamond Foods Lebensmittelhandel GmbH 0% 100% €0.5113 Ordinary shares Germany Gärtnerstraße
3, 25485
Hemdingen,
Germany
Premier Brands Limited*
Beatties Northern Limited**
0%
0%
100%
100%
£1.00 Ordinary shares
£1.00 Ordinary shares
Scotland Summit House
4-5 Mitchell
Street
Edinburgh
Scotland
EH6 7BD
Premier Foods, Inc. 0% 100% US$0.01 Common Stock sharesUnited
States
The
Corporation
Trust Company
Corporation
Trust Centre
1209 Orange
Street,
Wilmington
DE 19801, USA
Premier Foods ROI Limited
Premier Foods Ireland Manufacturing Limited*
0%
0%
100%
100%
€1.00 Ordinary shares
€1.26 Ordinary shares
Ireland 25-28 North
Wall Quay
Dublin 1
Ireland
G P Woolgate Limited** 0% 100% £1.00 Ordinary shares England &
Wales
PWC LLP,
Benson House
33 Wellington
Street, Leeds,
LS1 4JP
*Dormant entities
**Restored companies
28. Subsequent events
On 18 May 2022 the Group announced that it had extended the period of its revolving credit facility (RCF) by one year to May 2025 with the
same lending group. The covenant package attached to the RCF and tested bi-annually is unchanged (see note 19 for details).
On 18 May 2022, the directors have proposed a final dividend for the period ended 2 April 2022 for approval at the Annual General
Meeting. See Note 23 for more details.
27. Investments CONTINUED
Notes to the financial statements CONTINUED
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 156
Balance sheet
The following statements reflect the financial position of the Company, Premier Foods plc as at 2 April 2022 and 3 April 2021. The directors
have taken advantage of the exemption available under section 408 of the Companies Act 2006 and not presented a Company profit and
loss account.
Note
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Non-current assets
Investments in Group undertakings 4 1,114.8 1,112.5
Debtors 5 17.0 –
1,131.8 1,112.5
Current assets
Debtors 5 10.7 –
Deferred tax assets 6 1.3 0.8
Cash at bank and in hand 1.2 36.1
Total assets 1,145.0 1,149.4
Creditors: amounts falling due within one year 7 (1.4) (1.2)
Net current assets 11.8 35.7
Total assets less current liabilities 1,143.6 1,148.2
Equity
Called up share capital 8 86.3 85.5
Share premium account 1.5 0.6
Profit and loss account
1
1,055.8 1,062.1
Total shareholders' funds 1,143.6 1,148.2
1
The company has taken advantage of the exemption permitted by Section 408 of the Companies Act 2006 not to publish its individual profit and loss account and related notes.
During the period, the company made a loss of £1.0m (2020/21: £115.4m profit).
The notes on pages 159 to 162 form an integral part of the financial statements.
The financial statements on pages 157 to 162 were approved by the Board of directors on 18 May 2022 and signed on its behalf by:
ALEX WHITEHOUSE DUNCAN LEGGETT
Chief Executive Officer Chief Financial Officer
Premier Foods plc
www.premierfoods.co.uk
 157
FINANCIAL STATEMENTS
Statement of changes in equity
Called up
share capital
£m
Share
premium
account
£m
Profit and
loss account
£m
Total
£m
At 29 March 2020 84.8 1,409.4 (466.6) 1,027.6
Profit for the period
1
– – 115.4 115.4
Share-based payments – – 3.1 3.1
Purchase of shares to satisfy share awards – – (0.2) (0.2)
Shares issued 0.7 1.0 – 1.7
Capital reduction
2
– (1,409.8) 1,409.8 –
Deferred tax movements on share-based payments – – 0.6 0.6
At 3 April 2021 85.5 0.6 1,062.1 1,148.2
At 4 April 2021 85.5 0.6 1,062.1 1,148.2
Loss for the period – – (1.0) (1.0)
Share-based payments – – 3.4 3.4
Purchase of shares to satisfy share awards – – (0.4) (0.4)
Shares issued 0.8 0.9 – 1.7
Dividends – – (8.5) (8.5)
Deferred tax movements on share-based payments – – 0.2 0.2
At 2 April 2022 86.3 1.5 1,055.8 1,143.6
1
Profit for the prior period includes dividend income of £102.5m. During 2020/21, as part of a Group-wide capital re-organisation, the Company’s debts worth £72.5m owed to
Group undertakings were waived by way of dividends. In addition to this, the Company also received cash dividends worth £30m from its immediate subsidiary.
2
Following shareholder approval at a General Meeting held on 11 January 2021 and a hearing in the High Court of Justice, Business and Property Courts of England and Wales
on 9 February 2021, an order was given confirming the cancellation of the entire amount standing to the credit of the Company’s share premium account, which amounted to
£1,409.8m (‘Capital Reduction’). The order was produced to the Registrar of Companies and was registered on 10 February 2021, making the Reduction of Capital effective.
The Company has considered the profits available for distribution to shareholders. At 2 April 2022, the Company had retained earnings of
£1.1bn, of which the unrealised profit element was £0.5bn. The Company had profits available for distribution of £0.6bn.
The notes on pages 159 to 162 form an integral part of the financial statements.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 158
1. Accounting policies
Basis of preparation
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (‘FRS 101’).
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (“FRS 101”).
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted
international accounting standards (“Adopted IFRSs”), but makes amendments where necessary in order to comply with Companies Act
2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
• Cash flow statements and related notes
• Presentation of comparative period reconciliations
• Share-based payments
• Financial instruments and capital management
• Standards not yet effective
• Disclosures in respect of compensation of key management personnel
• Certain disclosures regarding revenue
• Certain disclosures regarding leases
The loss for the period of £1.0m (2020/21: £115.4m profit) is recorded in the accounts of Premier Foods plc, which includes dividend
income of £nil (2020/21: £102.5m). Dividends in the prior period included £72.5m in relation to the waiver of debts owed to Group
undertakings and £30m received from the Company’s immediate subsidiary.
The Company has ensured that its assets and liabilities are measured in compliance with FRS 101. The financial statements have been
prepared under the historical cost convention.
The preparation of the financial statements requires the directors to make estimates and assumptions that affect the reported amounts of
assets and liabilities, and the disclosure of contingent liabilities at the date of the financial statements. The key estimates and assumptions
are set out in the accounting policies below, together with the related notes to the accounts.
The directors consider that the accounting policies set out below are the most appropriate and have been consistently applied.
The Company is exempt as permitted under Financial Reporting Standard 101 from disclosing related party transactions with entities that
are wholly owned subsidiaries of the Premier Foods plc Group.
Investments
Investments are stated at cost less any provision for impairment in their value.
Impairment of Non-financial assets (including investments)
The carrying amounts of the Company’s non-financial assets, including investments in subsidiaries, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable amount. Impairment losses are
recognised in the profit and loss.
Taxation
Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the profit and loss account except to the
extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity
or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous periods.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the
temporary difference can be utilised.
Premier Foods plc
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FINANCIAL STATEMENTS
Notes to the Company
financial statements
Notes to the Company financial statements
CONTINUED
1. Accounting policies CONTINUED
Share-based payments
The Company operates a number of equity-settled share-based compensation plans. The fair value of employee share option plans
is calculated using an option valuation model, taking into account the terms and conditions upon which the awards were granted. In
accordance with International Financial Reporting Standard 2, Share-Based Payment (‘IFRS 2’), the resulting expense is charged to the profit
and loss account over the vesting period of the options for employees employed by the Parent Company, or treated as an investment in
subsidiaries in respect of employees employed by the subsidiaries where the expense is recharged. The value of the charge is adjusted to
reflect expected and actual levels of options vesting.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the share awards/options granted,
excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting
conditions are included in assumptions about the number of share awards/options that are expected to vest. At each balance sheet date,
the Company revises its estimates of the number of share awards/options that are expected to vest and recognises the impact of the
revision to original estimates, if any, in profit and loss, with a corresponding adjustment to equity.
Dividends
Dividend distributions to shareholders are recognised as a liability in the Group’s financial statements in the period in which the dividends
are approved by the shareholders, and for interim dividends in the period in which they are paid. Dividend distributions are recognised as a
liability in the period in which the dividends are approved by Company’s shareholders.
Financial guarantees
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group, the
Company considers these to be insurance arrangements and accounts for them as such. In this respect, the Company treats the guarantee
contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the
guarantee.
2. Significant estimates
Investments in Group undertakings
Impairment reviews in respect of investments in Group undertakings are performed at least annually and more regularly if there is an
indicator of impairment. The carrying amounts of the Company’s non-financial assets, including investments in subsidiaries, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated. The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
The key assumptions used in the impairment test which include long-term growth rates and discount rates are the same as that used for the
Grocery CGU described further in note 11 of the consolidated financial statements.
3. Operating profit
Audit fees in respect of the Company are £nil (2020/21: £nil). Note 5.2 of the Group consolidated financial statements provides details of
the remuneration of the Company’s auditor on a Group basis.
At 2 April 2022, the Company had two employees (2020/21: two). Directors’ emolument disclosures are provided in the Single Figure Table
on page 83 of this annual report.
4. Investments in Group undertakings
2021/22
£m
2020/21
£m
Cost
At 3 April 2021 / 29 March 2020 2,871.8 1,774.3
Additions 2.3 1,097.5
At 2 April 2022 / 3 April 2021 2,874.1 2,871.8
Accumulated impairment
At 3 April 2021 / 29 March 2020 (1,759.3) (1,759.3)
At 2 April 2022 / 3 April 2021 (1,759.3) (1,759.3)
NBV at 2 April 2022 / 3 April 2021 1,114.8 1,112.5
In 2021/22 a capital contribution of £2.3m (2020/21: £2.5m) was given in the form of share incentive awards to employees of subsidiary
companies which were reflected as an increase in investments.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 160
During the period as part of a Group-wide reorganisation, the Company’s direct subsidiary, Premier Foods Investment No.1 Limited
transferred its investment in Premier Foods Investment Limited to the Company. Following the transfer the Company allocated the value
from Premier Foods Investment No.1 Limited to Premier Foods Investment Limited. There has been no change to value of investments held
by the Company as a result of this transaction.
In FY 2020/21, as part of a Group-wide capital re-organisation, the directors passed a resolution to waive an intercompany debt along with
accrued interest owed by Premier Foods Investment Limited, a group subsidiary undertaking, via capital contribution amounting to £1.1bn.
Refer to note 27 in the Group financial statements for a full list of the undertakings.
Impairment testing for the period ended 2 April 2022 has identified that the value in use of the investment in Premier Foods Investments
Limited of £1.7bn is sensitive to reasonably possible changes in assumptions as set out in the table below.
The key assumptions used in the impairment test which include long-term growth rates and discount rates are the same as that used for the
Grocery CGU described further in note 11 of the consolidated financial statements. An illustration of the reasonably possible changes in key
assumptions in the impairment test for the investment in Premier Foods Investments Limited are as follows:
Reasonably possible change in assumption Impact on headroom
Revenue growth Increase/decrease by 1.5% Increase/decrease by £109.4m/£106.4m
Divisional contribution margin Increase/decrease by 2.0% Increase/decrease by £256.1m
Long-term growth rate Increase/decrease by 0.5% Increase/decrease by £136.9m/£116.0m
Discount rate Increase/decrease by 0.5% Decrease/increase by £126.6m/£149.4m
Under each of the above sensitivities no individual scenarios would trigger an impairment of the investment.
5. Debtors
Amounts due less than one year
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Amounts owed by Group undertakings 10.7 –
IFRS 9 ECL provision charge (0.0) –
Total debtors 10.7 –
Amounts due after more than one year
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Amounts owed by Group undertakings 17.1 –
IFRS 9 ECL provision charge (0.1) –
Total debtors 17.0 –
6. Deferred tax
2021/22
£m
2020/21
£m
At 4 April 2021 / 29 March 2020 0.8 0.1
Credited to the statement of profit and loss 0.3 0.1
Credited to equity 0.2 0.6
At 2 April 2022 / 2 April 2021 1.3 0.8
The deferred tax asset relates to share-based payments.
7. Creditors: amounts falling due within one year
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Other payables (1.4) (1.2)
Total creditors (1.4) (1.2)
The losses surrendered as Group Relief between UK members of the Group have been surrendered for no consideration.
Premier Foods plc
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FINANCIAL STATEMENTS
Notes to the Company financial statements
CONTINUED
8. Called up share capital and other reserves
a) Called up share capital
As at
2 Apr 2022
£m
As at
3 Apr 2021
£m
Authorised, issued and fully paid
862,785,277 (2020/21: 855,126,805) ordinary shares of 10 pence each 86.3 85.5
All of the ordinary shares rank equally with respect to voting rights and the rights to receive dividends and distributions on a winding up.
b) Share-based payments
The costs reflect the Company’s share option schemes in operation. Further details are available in note 22 of the Group’s consolidated
financial statements.
The charge relating to employees of the Company amounted to £1.1m (2020/21: £0.6m). Further details of these schemes can be found in
the Directors’ Remuneration Report on page 79 to 95.
9. Dividends
The following dividends were declared and paid during the period:
52 weeks
ended
2 Apr 2022
£m
53 weeks
ended
3 Apr 2021
£m
Ordinary final of 1.0 pence per ordinary share (2020/21: nil) paid 30 July 2021 8.5 –
On 18 May 2022, the directors have proposed a final dividend of 1.2p per share for the period ended 2 April 2022 subject to the ratification
at the AGM by the shareholders. Dividend distributions are recognised as a liability in the period in which the dividends are approved by
Company’s shareholders.
10. Contingencies and guarantees
Premier Foods plc has provided guarantees to third parties in respect of borrowings of certain subsidiary undertakings. The maximum
amount guaranteed at 2 April 2022 is £0.5bn (2020/21: £0.5bn).
11. Subsequent events
On 18 May 2022 the Group announced that it had extended the period of its revolving credit facility (RCF) by one year to May 2025 with
the same lending group. The covenant package attached to the RCF and tested bi-annually is unchanged (see note 19 of the Group financial
statements for details).
On 18 May 2022, the directors have proposed a final dividend for the period ended 2 April 2022 for approval at the Annual General
Meeting. See Note 9 for more details.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 162
Additional disclosures
Enriching Life Plan Disclosure Table
We will annually disclose information to demonstrate our progress against our Enriching Life Plan, and other
key Environmental, Social and Governance measures. All targets are for 2030 against a 2020 baseline, unless
otherwise stated. Several of these measures are newly developed and will evolve with improvements in data
availability and information from suppliers and other parties. In some areas information from prior years may
be updated if better information subsequently becomes available. Some measures are still under development
and will be introduced as robust information becomes available.
Our Products - Making nutritious and sustainable food
Commitment KPI measure Comments
2020/21
baseline 2021/22
Make great tasting, healthier and more nutritious food
More than double
sales of products that
meet high nutrition
standards
Value of sales of products meeting high
nutritional standards in £m.
Total company branded sales of products of a
high nutritional standard; defined as products
scoring less than 4 on the UK Department of
Health’s Nutrient Profiling Model.
Declines reflect the exceptional volumes
experienced in the prior year, due to the
elevated consumer demand observed during
the peak of the Covid pandemic.
320 286
More than 50% of our
products will provide
additional health or
nutrition benefits
Proportion of products which meet the
requirements for a regulated health or
nutrition claim.
Products with an additional health benefit
are defined as products that qualify for
a regulated health or nutritional claim.
Calculated at a stock keeping unit (SKU) level.
38% 40%
Support the nation’s shift to plant-based diets
Grow sales of plant-
based products to
£250m per annum
Value of sales of plant-based products in £m. Total company branded sales of products
made to a vegan recipe. They do not, by
design, contain meat, dairy, eggs and other
animal products, and all principal ingredients
are plant-based. We have reassessed which
existing Premier Foods brands and products
should currently be classified as plant-based
and revised the baseline announced at the
time of the Enriching Life Plan launch in
October 2021.
Declines reflect the exceptional volumes
experienced in the prior year, due to the
elevated consumer demand observed during
the peak of the Covid pandemic.
157 149
Each core category has
plant-based offering
Number of core categories with a plant-based/
meat or dairy free offering.
We have 20 core ranges, defined as product
ranges constituting at least 10% of the
revenue of total category, as well as being
distinctly different categories for consumers
as defined by shopper insights.
50%
(10/20)
55%
(11/20)
Reduce the environmental impact of our packaging
100% of packaging to
be reusable, recyclable
or compostable by 2025
Percentage of total packaging (by weight) which
meets the On-Pack Recycling Labelling Scheme
(OPRL) recycled categories.
Primary, secondary and tertiary packaging
which is recyclable either at kerbside,
recycling points or front of store, using latest
OPRL definitions. Based on tonnage.
https://www.oprl.org.uk/
94% 96%
Reduce carbon impact
of our packaging in line
with our agreed climate
commitments
Measurement under development for future
disclosures.
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FINANCIAL STATEMENTS
Additional disclosures CONTINUED
Enriching Life Plan Disclosure Table
Our Planet - Contributing to a healthier planet
Commitment KPI measure Comments
2020/21
baseline 2021/22
Take action on Climate Change
Develop validated
Science-based Targets
aligned with “Business
Ambition for 1.5”
Targets submitted to, and approved by, Science
Based Targets Initiative (SBTi).
https://sciencebasedtargets.org/companies-
taking-action
Submission
planned
Summer
2022
Reduce scope 1 and 2
emissions by 42% by
2030 and achieve net
zero by 2040
Scope 1 emissions (tonnes of CO
2
e). 39,113 * 37, 621
Scope 2 emissions - gross location based
(tonnes of CO
2
e).
21,247 * 18,567
Scope 2 emissions - net market based
(tonnes of CO
2
e).
This is driven by the purchase of Renewable
Energy Guarantees of Origin.
31,983 * 4
Total Scope 1 & 2 gross location based
(tonnes of CO
2
e).
60,360 * 56,188
Change in Scope 1 & 2 emissions since 2020/21
- gross location based (%).
-6.9%
Total Scope 1 & 2 emissions net market based
(tonnes of CO
2
e).
71,096 * 37,625
Change in Scope 1 & 2 emissions since 2020/21
- gross location based (%).
-47.1%
Overall Scope 1 & 2 intensity (g CO
2
e per KG of
product) - gross location based.
Improvements made in total emissions;
reduction not in line with reduced production
volumes, due to product mix and non volume
related emissions.
164.0 * 168.6
Change in Scope 1 & 2 emissions since 2020/21
- gross location based (%).
2.8%
Overall Scope 1 & 2 intensity (g CO
2
e per KG of
product) - net market based.
This is driven by the purchase of Renewable
Energy Guarantees of Origin.
193.2 * 112.9
Change in Scope 1 & 2 emissions intensity since
2020/21 - net market based (%).
-41.6%
Total Energy Usage (MWh). 282,567 275,577
Energy use ratio (MWh/tonnes). Improvements made in total energy usage;
reduction not in line with reduced production
volumes, due to product mix and non volume
related energy usage.
0.77 0.83
Reduce scope 3
emissions by 25% by
2030 and target net
zero by 2050
Scope 3 emissions (tonnes of CO
2
e). See comments below ** 1,139,062
Reduction in Scope 3 emissions since
2020/21 (%).
Scope 3 intensity (KG CO
2
e per KG of product). 3.4
Change in Scope 3 emissions intensity since
2020/21 (%).
We have adopted a new approach for the calculation of our emissions, with external support. We include assumptions for all material activities using the
GHG Protocol. We plan to further refine and verify our approach and will continue to adopt better data as it becomes available.
* Based on our new calculations our scope 1 & 2 disclosures for 2020/21 have been updated from those shown in the 2020/21 annual report.
** Our scope 3 disclosure is the result of new work, with external support, scrutinising the emissions from key activities associated with our purchased goods
and services. We have had a particular focus on ingredients, using the best available primary data, and industry data sources where this is not available.
At the time of reporting we are developing more detailed modelling to improve our understanding of upstream transport and distribution. We are also
validating data for 2020/21 which we will use as a baseline for future disclosures and comparison.
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 164
Our Planet - Contributing to a healthier planet
Commitment KPI measure Comments
2020/21
baseline 2021/22
Protect our natural resources
Zero deforestation and
conversion free palm
and meat supply chain
by 2025
Proportion of palm directly purchased which is
RSPO Certified.
https://rspo.org/ 100% 100%
Percentage of palm products directly purchased
which are RSPO certified, segregated.
As supply improves we intend to transition
more of our palm to source segregated
certified and using mass balance certification
where this is not possible. Availability, pricing
and sales mix will impact year-on-year
performance.
57% 54%
Percentage of palm directly purchased which is
RSPO certified, mass balance.
43% 46%
Percentage of meat products directly purchased
which are from low risk origins or deforestation
free certified.
86% 90%
Percentage of meat products purchased as part
of an ingredient which are from low risk origins
or deforestation free certified.
We are working with suppliers to develop a
reporting methodology for future disclosures.
Zero deforestation and
conversion free across
entire supply chain
Percentage of soy products directly purchased
which are from a low risk origin or RTRS
certified.
https://responsiblesoy.org/ 100% 100%
Percentage of soy sourced through certified
credit schemes where purchased as part of an
ingredient.
At time of reporting, we are in the process
of purchasing certified credits to cover 100%
of the soy used within our ingredients in
2021/22.
100%
Percentage of soy sourced through certified
credit schemes where used as feed in animal
farming for products in our supply chain.
At time of reporting, we are in the process of
purchasing certified credits to cover 100% of
the soy used in animal feed in 2021/22.
100%
Percentage of paper & board purchased directly
which are from low risk origins or PEFC or FSC
certified.
100% 100%
Percentage of sugar purchased directly
which are from areas of low risk origin or are
deforestation free certified.
Change in purchased mix from beet sugar to
cane sugar, working with suppliers to better
demonstrate deforestation free status.
93% 89%
Percentage of cocoa purchased directly
which are from areas of low risk origin or are
deforestation free certified.
We are working with suppliers to develop a
reporting methodology for future disclosures.
Champion regenerative
agricultural practices
for key ingredients
Number of initiatives supporting more
sustainable agricultural practices.
We are working with suppliers to develop a
reporting methodology for future disclosures.
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FINANCIAL STATEMENTS
Additional disclosures CONTINUED
Enriching Life Plan Disclosure Table
Our Planet - Contributing to a healthier planet
Commitment KPI measure Comments
2020/21
baseline 2021/22
a.
Reduce waste across our value chain
Halve our food waste
Total food waste (tonnes) Using Champions 12.3 methodology including
anaerobic digestion, composting, land
spreading, energy recovery and landfill.
8,012* 7,609
Change in total food waste since 2017 -5.0% *
Total food waste (% of production) 2.4% * 2.2%
Change since 2017 -7.5% *
Support our suppliers
to halve their food
waste
We are working with suppliers to develop a
reporting methodology for future disclosures.
Make better use of
any food waste we
do generate and
redistribute 750t for
human consumption
Food waste redistributed for human
consumption (tonnes per year)
Food redistributed to organisations who make
available for human consumption.
306 750
Use the strength
of our brands to
engage shoppers and
consumers to reduce
food waste in the home
We are developing a measure for future
disclosures.
* All food waste baseline figures and comparisons show 2017 data, as per Champions 12.3 commitment and data is based on calendar years.
b.
Other key environmental and supply chain measures
Total production (tonnes) 367,992 333,260
Total water withdrawn (m
3
) All incoming water including abstraction
(groundwater and surface water) and mains
derived.
776,026 720,749
Water usage ratio (m
3
/tonne) Improvements made in total water usage;
reduction not in line with reduced production
volumes due to product mix and non volume
related water usage.
2.11 2.16
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Annual Report for the 52 weeks ended 2 April 2022
 166
Our People - Nourishing the lives of our colleagues and communities
Commitment KPI measure Comments
2020/21
baseline 2021/22
Create a diverse, healthy and inclusive culture
Gender balance in our
senior leadership team
Percentage of senior management roles which
are held by women.
Senior management is considered to be our
Executive Leadership Team and their direct
reports. It is a population of c54. We would
like to reach a position where females make
up between 45% and 55%, reflecting that
it is a relatively small team and therefore
percentage measures can be impacted by
short-term fluctuations in individual roles.
This approach also recognises that some
individuals do not identify with traditional
binary gender definitions.
28% 37%
Percentage of general management roles which
are held by women.
43.5% 46.0%
Percentage of total colleagues that are women. 36.7% 37.3%
Mean gender pay gap (hourly). 8.4% 6.8%
Mean gender pay gap (bonus). 37.8% 13.6%
Our Diversity will
reflect regional
demographics
Percentage of employees who are non-white
compared with the national average.
Premier Foods data is compared against a UK
working population of people from non-white
backgrounds of 12.5% according to McGregor-
Smith Review 2017.
We plan to improve our external
benchmarking to be more representative of
our local communities.
10.6% 14.4%
Percentage of employees who are self
identifying as LGBTQ+ compared with the
national average.
Premier Foods data is compared against
figures from the Office of National Statistics
2017, stating that 4.6% of the UK population
reports to be part of the LGBTQ+ community
and that 4.1% of the population ‘prefer not
to say’. 4.2% of our colleagues reported to
be part of the LGBTQ+ community with 6%
‘prefer not to say’. This was not measured in
previous years.
4.2%
We plan to improve data capture on the diversity of our employees and use more representative local community data where available.
All sites will achieve
platinum level Health
and Wellbeing
accreditation
Number of sites achieving a Health and
Wellbeing accreditation.
We will start a programme in 2023 to accredit
our sites for Heath and Wellness provisions.
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FINANCIAL STATEMENTS
Our People - Nourishing the lives of our colleagues and communities
Commitment KPI measure Comments
2020/21
baseline 2021/22
Be a leading developer of people in the Food & Drink Industry
We will provide skills
programmes and work
opportunities for the
young and excluded
groups to enable a
fulfilling career in the
Food Industry
Number of apprenticeships. Total number of employees participating in
an apprenticeship programme. Slight drop in
intake due to Covid restrictions.
87 78
Number of partnerships with local schools,
colleges, charities or social enterprises
developing employability skills.
Number of partnerships with groups (schools,
colleges, charities, trade bodies) who can help
us support the young and excluded groups
into employment.
2 2
Support employees
to develop key
skills with 75% of
Science, Technology,
Engineering and Maths
(STEM) vacancies filled
by internal candidates
Percentage of STEM vacancies filled by internal
candidates.
Percentage of all roles which require STEM
skills which are filled by internal candidates,
apart from first entry level.
30%
Number of T-level placements. Awaiting development of relevant T-level
placements. Expect to start tracking from
autumn 2022.
Number of STEM apprenticeships. Number of apprenticeships in roles
developing STEM skills.
43 37
80% of colleagues
will feel they have
opportunity to develop
and grow
Percentage of colleagues stating that they feel
they have opportunities to develop and grow.
Direct responses from annual employee
survey from 2022 . Percentage that agree or
strongly agree with the statement.
53%
Other key employee measures
LTA (‘Lost Time Accidents’) 0.10 0.16
RIDDOR (‘Reporting of Injuries, Diseases and
Dangerous Occurrences Regulations’)
0.02 0.12
Be a caring community partner
We will donate 1
million meals per
annum to those in food
poverty
Number of meals donated to charities. Direct product and financial donations to
programmes supporting food redistribution to
those in food poverty and food insecurity.
1 meal = 420g for product donations, as per
guidance from WRAP, and £0.25 for financial
donations, as per guidance from FareShare.
In the future this will also include leveraged
donations from employees, customers and
suppliers, where supporting Premier Foods
initiatives.
593,859 616,772
Be more of a force
for good in our
communities by
volunteering at least
1,000 colleague days
each year
Number of days volunteered by colleagues to
charities or registered good causes.
1 day is at least 8 hours of employee time
from their paid hours. Recorded from 2022
onwards.
212
Total Community Investment
contribution value.
All direct and leveraged contributions
including financial, in-kind, product donations
and volunteering.
In future, we will move towards reporting in
line with the B4SI reporting standards.
£841,217 £901,509
Additional disclosures CONTINUED
Enriching Life Plan Disclosure Table
Premier Foods plc
Annual Report for the 52 weeks ended 2 April 2022
 168
Additional information
Shareholder enquiries
The Company’s Register of Members
is maintained by our registrar, Equiniti.
Shareholders with queries relating to
their shareholding should contact Equiniti
directly using the details given below:
Equiniti, Aspect House, Spencer Road,
Lancing BN99 6DA.
Telephone – 0371 384 2030 (or +44 121 415
7047 if calling from outside the UK). Calls to
this number are charged at a national rate.
Lines are open 8.30 am to 5.30 pm Monday
to Friday, excluding UK public holidays.
Or visit Equiniti’s Shareview website:
www.shareview.co.uk
Company advisers
Statutory Auditor
KPMG LLP
15 Canada Square
London E14 5GL
Joint corporate brokers
Jefferies International
100 Bishopsgate
London EC2N 4JL
Peel Hunt LLP
Moor House
120 London Wall
London EC2Y 5ET
Shore Capital
Cassini House
57 St James’s Street
London SW1A 1LD
Financial PR advisers
Headland
Cannon Green
27 Bush Lane
London EC4R 0AA
Trade marks
The Company’s trademarks are shown
in italics throughout this annual report.
The Company has an exclusive worldwide
licence to use the Loyd Grossman name
on certain products. The Company has
an exclusive licence to use the Cadbury
trademark in the UK (and a non-exclusive
licence for use in other specified territories)
on a variety of ambient cake products.
Cadbury is a trade mark of the Mondelēz
International Group. Cup Noodles and
Soba Noodles are trademarks of Nissin
Foods Holding Co., Limited (‘Nissin’), who
is the Company’s largest shareholder. The
Company has entered into a co-operation
agreement with Nissin to market and
distribute certain Cup Noodles and Soba
Noodles products in the UK and certain
other jurisdictions.
Cautionary Statement
The purpose of this annual report is to
provide information to shareholders
of Premier Foods plc (‘the Company’).
The Company, its directors, employees
and advisers do not accept or assume
responsibility to any other person to
whom this document is shown or into
whose hands it may come and any such
responsibility or liability is expressly
disclaimed. It contains certain forward-
looking statements with respect to the
financial condition, results, operations
and businesses of the Company. These
statements and forecasts involve risk and
uncertainty because they relate to events
and depend upon circumstances that will
occur in the future. There are a number
of factors that could cause actual results
or developments to differ materially
from those expressed or implied by these
forward-looking statements and forecasts.
Nothing in this annual report should be
construed as a profit forecast.
The production of this report supports the work of the Woodland Trust,
the UK’s leading woodland conservation charity. Each tree planted will
grow into a vital carbon store, helping to reduce environmental impact
as well as creating natural havens for wildlife and people.
Premier Foods plc
Premier House
Centrium Business Park
Griffiths Way
St Albans
Hertfordshire
AL1 2RE
01727 815850
www.premierfoods.co.uk
Registered in England and Wales No. 5160050
Premier Foods plc Annual Report for the 52 weeks ended 2 April 2022
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