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(Alliance News) - Shares in Premier Foods PLC on Wednesday soared after it struck a deal to suspend pension deficit payments sooner than expected.
Shares in Premier Foods leapt 13% to 156.60 pence in London on Wednesday. It was the best performing stock in the FTSE 250 index.
The St Albans, Hertfordshire-based food manufacturer, which creates products for various brands including Ambrosia, Bisto, Mr Kipling and Oxo, said it had reached agreement with the RHM Pension Scheme Trustee to suspend pension deficit contribution payments from April 1.
The suspension of future contributions is taking place earlier than originally expected, reflecting the strong performance of the pension scheme, the company said.
As a result, Premier Foods said it would benefit from GBP33 million increased free cash flow for the financial year ending March 29 2025.
Subject to the results of the next triennial valuation, it anticipates no further contributions to be payable after this date.
Chief Financial Officer Duncan Leggett said the suspension "substantially increases the free cash flow available to us and presents us with enhanced capital allocation options to deliver on our growth ambitions".
By Jeremy Cutler, Alliance News reporter
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