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(Alliance News) - Premier Foods PLC on Thursday has boosted its annual profit expectations as it heads into its final quarter with "strong momentum".
The St Albans, England-based food manufacturer now expects adjusted pretax profit to be around GBP125 million for the year ending in April, which would top the current company-compiled consensus estimate of GBP119.3 million. The new figure would represent an 8.4% increase year-on-year from financial 2021's 52-week figure of GBP115.3 million.
It expects trading profit to be GBP145 million, above consensus of GBP140.7 million. This would be a 2.2% decrease from financial 2021's 52-week trading profit of GBP148.3 million, however.
The manufacturer reported a drop in sales of 1.8% year-on-year in its third-quarter ending January 1, but growth of 7.0% on a two-year comparative. The Christmas period drove its brand to its best performance to date, with its branded Sweet Treats division being the only one to report growth from the previous year of 6.3%.
The drop in year-on-year sales is largely due to "pandemic-related elevated volumes and stock buy in ahead of EU exit in Ireland," the company said.
Premier Foods outperformed the market by 3.5%, gaining 90 basis points of market share in the 12 weeks to Christmas day.
Chief Executive Officer Alex Whitehouse commented: "The strong momentum from the first half of the year continued into the key Q3 trading period, with our brands growing by 11% compared to two years ago. This was well ahead of the market across all our categories and resulted in very encouraging share gains. This performance continues to underline the popularity of our brands but also demonstrates the strength of our established branded growth model, with many of our brands supported by advertising campaigns and new product innovation during the quarter."
It expects to continue deleveraging, and the ratio of net debt to earnings before interest, tax, depreciation and amortisation is moving towards medium-term targets of 1.5 times.
The company's share price rose by 6.4% to 117.00 pence each in London on Thursday morning.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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