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Annual trading profit of over £130M and profit before tax of over £90M. Current mcap is around £800M so current situation is definitely not factored into sp. Mcap should be in the range of £1.5-2bn.
There are more positives here than negatives. Sales have been going up for the last 3 years, money generated is being used to lower debt hence lower interest which means more profit and the combined pension scheme is now in surplus.
I agree the sp has risen but it is still undervalued. Even a conservative value of £1bn means there is a 20% upside to the current sp.
Re "Debt is going down and profits up. Whats not to like"
Already mostly in the sp 316. You'll need a bit more than that to ramp this up to £2
ive brought back in. This is a brilliant share. sp should be £2+. Debt is going down and profits up. Whats not to like
Old news now
Stumbled across this news and must say this looks exciting!
Having watched PFD rise from 60p onwards, it's hard to accept buying in at 100p, but to be honest this changes the dynamic somewhat. Will do more research soon, with a view to buying some between now and the HY Results announced next month.
"Cake and gravy maker Premier Foods (PFD) could be in line for a windfall amid a bid from Italy’s Newlat Food for bread maker Hovis, in which it has a 49% stake. Having written off the value of the asset in 2016, the proceeds from any sale would represent a hefty profit on the ..."
"The Italian group is ready to spend as much as 100 million pounds for the bread maker, which is owned by Premier Foods (L:PFD) and The Gores Group, the source told said.
The acquisition of Hovis would allow Newlat Food to increase its annual turnover to 1 billion euros, reaching ahead of time a goal set when it listed in October 2019."
https://www.sharesmagazine.co.uk/article/premier-foods-redeems-40-million-worth-of-bonds
https://news.sky.com/story/italian-food-group-newlat-joins-pursuit-of-100m-bread-maker-hovis-12087896
https://uk.reuters.com/article/uk-hovis-m-a-newlat/italys-newlat-food-has-offered-bid-for-britains-hovis-source-idUKKBN26P0PQ?il=0
Thought it was weird earlier on, but looks like its recovering. Agree, not considering any sales until the 10th November. Too much good news.
ATs bouncing the price around, presumably to pick up more shares cheaply. Trying to drive back to 90p.
Not having my shares - will hold for 120p+
Expecting bid for Hovis plus half year results due 10th November - expect to be good if in line with Tesco UK growth.
A HOLD in my view or strong buy if you are considering entering
Rich
Wow!! Massive buying today towards close. Influenced by results from Tesco?
LTIP threshold for this year is 11.69 EPS and stretch is 12.69 so if they don’t hit threshold they get zero on that element weighted one third.
Therefore I believe EPS will be about 12.something pence.
Can see the Premier Foods SP flying on results in November which I imagine will be even better than expected. Will be topping up as much as possible between then and now
cricket2
the deal with gores was that gores paid £15m upfront, the remaining £15m had performance conditions that needed to be achieved and three years were allowed. These were never achieved, so premier wrote this off.
at the same time both gores and premier gave a shareholder loan of £16m each so that hovis could use this to borrow £80m to invest in new equipment. these shareholder loans attract 10% interest and have been accumulating on hovis books. in 2019 hovis paid £8m to premier and looking at the hovis 2019 results, gores also got same amount.
the shareholder loan is still outstanding, but this will not matter once the takeover happens.
To what I thought was going to be a good day
Bistro, can you explain, Premier only got 15m and are still owed 8m of that
Best Regards
Hovis is not exactly bread to me anymore its just a pulpy doughy mix. I think we have all been spoilt with so much choice these days.
Not much left of British historical enterprise to sell to foreign ownership , another nail in the coffin for once Great Britain , a trend started by that looney John Major , who didn't care who owned the businesses as long as they stayed , and a lot did not! But one enterprise I do I wish we could sell and export in quantity are all the hangers on in our ever increasing Royal family !
It looks that way, and 100 million is the lowest price, it maybe higher, 150 has been in the press , so 75 million to us. Also, full year results and the winter sales to come.
That would be great news if they did pay £100m so about £50m each partner, now would PFD pay off another £40m -£50m of debt. ?
Italians eye up bread maker Hovis with takeover bid: Bread maker Hovis could be snapped up by Italian firm Newlat Food after more than 130 years of British ownership.
Yet more good news on reducing debt.
Premier Foods plc Partial redemption of Senior Secured Notes
Intraday Premier Foods Chart
Intraday Premier Foods Chart
06/10/2020 7:00am
UK Regulatory (RNS & others)
TIDMPFD TIDMIRSH
RNS Number : 1596B
Premier Foods plc
06 October 2020
6 October 2020
Premier Foods plc
("Premier Foods" or "the Group")
Partial redemption of Senior Secured Floating Rate Notes due July 2022 (the "Notes")(1)
The Group announces that, it has provided a certificate to HSBC Corporate Trustee Company (UK) Limited, as Trustee, and HSBC Bank plc, as paying agent, for the Group's Notes due July 2022, notifying of its intention to redeem GBP40 million of the GBP130 million outstanding. This is in line with requirements of the Indenture of the Notes(2) and is further to the GBP80 million redemption completed in June this year.
This partial redemption reflects the Group's strong trading momentum during the first half of this financial year together with further progress on reducing Net debt. As the Group continues on its path to deleverage the business, its intention is to utilise future free cash flow to reduce its cost of financing. Following the completion of this partial redemption of Notes, the Group expects to save approximately GBP2m per annum in interest costs.
Further to the certificate, the Group hereby confirms that, pursuant to the terms of the Indenture(2) , GBP40 million of the Notes will be redeemed at par, plus accrued and unpaid interest up to, but excluding, the redemption date(3) . The redemption date is 1 December 2020 and the record date is 30 November 2020.
There are no other changes to the Group's capital structure following this announcement. The Group's GBP300m Senior Secured fixed rate Notes due October 2023 and its GBP176.6m committed Revolving Credit Facility with its lending bank group, which was undrawn at the end of September, are unchanged.
Half year results announcement
The Group will release its Half year results for the 26 weeks ended 26 September 2020 on 10 November 2020; further details will be provided in due course.
Bread is a shrinking market and very low margin. I'm happy for them to sell it. We certainly don't want to be adding more debt to buy it, debt reduction is too important right now so we can refinance at a reasonable rate.
Agree with your sentiments CEREUS. Hovis has been around since 1886 - comes from the latin Hominis Vis - Strength of Man! It was only a brown wheatgerm loaf for many years. There's a lot of heritage in this name. A while back Premier saw the benefit in the branding and now we have Hovis White, Hovis Wholemeal, Hovis Granary. Hovis used to bake such lines as crumpets, muffins, pancakes, scones, finger rolls, burger buns. For bakers these morning lines are usually quite profitable. There's other bread products they could consider nowadays as well. When they stopped baking these lines to focus on the core product - bread, they also closed down the relevant bakeries and plant and machinery. The challenge would be to convince them to reinvest to produce and deliver. Alternatively could licence out to quality independent bakeries. With their increase in market share from 20 to 22 %, GP increase about 5% - and now eating at home more, you have to think there are opportunities they could explore. May drop them an email Kallumama. BTW Ridley Scott directed the 'Boy on the bike' advert - Gold Hill in Dorset - not up North at all.
It had a slump but now it's ok. It's the bread I buy out of choice. Please don't sell it. But I don't eat shop bought baked beans any more they all have too much sugar in.
We should not sell the business , the name as the suitors rightly say has a reputation of good wholesome food , and instead of selling we should be making capital out of it , by producing more bakery products under the brand name . Innovation is what we lack , along with foresight , a British malaise . Look what we have got rid of , Rolls Royce , Bentley , Mini , the list is endless , and surprise surprise the foreign owners make a go of them , even daring to make a huge profit.. We should take stock and have a pride in our past , and build on that reputation , not dump it .
Sorry to be ignorant but could somebody please explain what price I should be looking for to break even having bought shares in 2011/2012 but which were devalued by a share consolidation of 10 to 1. I acquired overall some 100,000 shares at an average price of 11.8p/share but which was then subject to the consolidation. Would I be correct in thinking therefore that the average price then became £1.18/share and that this is what I need to see it achieve before selling at a breakeven level? Thanks for any thoughts on this.