You are entitled to your opinion + so am I! I am not a shorter or a ramper. If you don't like people stating their opinions then don't read them. Carry on living in fantasy land...just read all the positive comments and live your life 'blinkered'....I have a lot of experience in this field. Ignore me at your peril.
Premier Foods' (PFD) results were complicated by a raft of exceptional charges related to the refinancing and restructuring of the struggling business. Strip these out, along with disposals, and the group actually MADE a trading profit of £48.1m in the first six months of the year - up 2 per cent on last year.
That was thanks to cost control and hence margin improvement, but also a shifting of some consumer marketing spending into the second half. It also came despite a significant slump in revenues, driven in part by the mild weather, which affected sales of wintry foods such as gravy and soup. But chief executive Gavin Darby explained that the sales decline was also due to a focus on improving the quality of sales, which saw Premier REIN IN loss-making promotions. This resulted in lower volumes, but boosted the average return on promotions from 36 to 48 per cent.
Having refinanced its debt-laden business, Premier is also embarking on a massive marketing campaign, which will include television ads for Mr Kipling cakes and Homepride sauces and bakes in the second half. New products and packaging designs are also set to be unveiled. Marketing spend will be double that in the first half.
Investec expects pre-tax profit of £93.1m for the full year, giving EPS of 10p, up from £81.1m last year.
Premier is relying on its marketing campaign and product launches to re-energise sales. Since full-year trading is likely to be heavily weighted to the second half, we leave our recommendation unchanged until signs of improvement emerge. Hold.
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