28 October 2010

Interim Management Statement for the three months ended 30 September 2010

Branded sales volumes up 4.6%, repricing complete

• Branded sales volumes up 4.6%, value down 0.5%
• Increasingly challenging environment with grocery market volumes down 3.2%, value down 2.3%
• Continued branded volume market share growth, up 0.7 ppts to 23.0%, value share down 0.3 ppts to 24.0%
• Drive brand sales volumes up 7.9%, value up 3.9%
• Total Group sales down 4.2% owing to reduction in non-branded sales
• Extended licensing agreement signed with Kraft for Cadbury Cakes
• Repricing completed recovering sharp rise in wheat raw material costs
• Successfully restructured swap portfolio substantially reducing risk
• Efficiency programmes continue to make progress
• On track to deliver £100m of recurring cash flow for the full year
• Group continues to aim to make progress in 2010 but the slowdown in Q3 means this is likely to be more modest and is, as always, dependent on Christmas trading

Robert Schofield, Chief Executive, said:

“We are making good progress on our stated strategic objectives, despite an increasingly challenging trading environment.  Our brands continued to grow by 4.6% in volume over the period.  This is against a background of our categories declining by an average of 3.2% for the quarter and represents robust market share gain. Although Group sales have fallen as a result of ceding own label contracts in bread, and the general decline of the own label markets.

“Following constructive discussions with leading retailers, we have completed our repricing, in both Grocery and Hovis to recover the sharp rise in wheat prices.  Our Grocery, Hovis and Meat-free businesses are trading well, taking market share and we expect each to match or increase Trading profit for the year.  Profit in our non-branded chilled business, however, will be lower given competitive pressures and higher input costs.

“We continue to reduce net debt and remain on track to generate at least £100m of recurring cashflow for the year as a whole.  In line with our declared financial strategy, we have secured an important restructuring deal which reduces financial risk in our swap portfolio and which opens the way to diversifying sources of funding.

“We still aim to make progress in the full year but the slowdown in Q3 means this is likely to be more modest and is, as always, dependent on Christmas trading.”

Attached below is the full release.

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For further information:

Maitland       +44 (0) 20 7379 5151
Neil Bennett
Emma Burdett
Brian Hudspith


15 February 2011

Preliminary results for the year ended 31 December 2010

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