13 November 2018

Premier Foods announces Half year results for the 26 weeks ended 29 September 2018

This morning we've released our Half year results for the 26 weeks ended 29 September 2018. 

Financial Headlines
- Half year revenue up +1.3%; Q2 revenue up +1.0%
- Trading profit growth of +6.2% to £51.0m
- Adjusted profit before tax up +14.3% to £30.2m
- Statutory loss before tax (£2.2m); loss after tax (£0.7m)
- Net debt £509.5m; a £25.8m reduction on H1 FY17/18
- Combined pensions surplus £282.7m compared to £317.0m at 31 March 2018

Strategic and operational Headlines
- Mr Kipling brand relaunch in the UK delivered revenue growth of +13%
- Batchelors strong performance as innovation programme continues to deliver results
- Quarter 2 revenue growth demonstrates portfolio resilience despite hot summer in the UK and operational challenges associated with final phase of logistics transformation programme
- Group in discussions with third parties regarding the potential disposal of Ambrosia

Gavin Darby, Chief Executive Officer

“We are pleased to report revenue growth of +1.3% in the first half, a +6.2% increase in Trading profit and Net Debt £26m lower compared to last year. Mr Kipling, the Group’s largest brand was key to this growth following an excellent consumer response to its brand relaunch in the UK with revenues up +13%. Batchelors, the Group’s third largest brand, delivered revenue growth of +6.8% as consumers continue to enjoy its new convenient pots range.”

“We saw improved resilience displayed by the business during the hot summer experienced in the first half of the financial year; however we are presently experiencing some operational challenges with the implementation of the final Sweet Treats phase of our logistics transformation programme.”

“While we are committed to our strategy of improving operating performance and targeting a Net debt to EBITDA ratio below 3.0x by March 2020, we are also working in parallel to identify other strategic opportunities to accelerate the Company’s turnaround. The Board has determined that it should focus resources on areas of the business which have the best potential for growth through accelerated investment in consumer marketing and high return capital projects. Accordingly, we are pursuing options to fund these plans as well as delivering a meaningful reduction in Net debt, through discussions with third parties regarding the potential disposal of our Ambrosia brand. Although there is no certainty that any transaction will complete, we will update shareholders in due course.”

“We have a strong innovation plan in place for the second half of the year, and profit expectations for the full year remain unchanged.”

“Having today announced a new strategic initiative for the business, I have decided to step down as CEO on 31st January 2019, which will mark the sixth anniversary of my joining Premier Foods. The Board will now begin a recruitment process for my successor.”

<< To read and download the full release in PDF format, please click this link >>

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