(Alliance News) - Premier Foods PLC on Tuesday reported a double-digit decline in profit for the first half of its financial year, due to the reduced level of demand for branded products compared to the prior period during the Covid-19 lockdown.
Shares in the Hertfordshire-based food producer were down 4.0% at 109.60 pence on Tuesday in London, the worst performer in the FTSE 250.
For the six months ended October 2, pretax profit declined 39% year-on-year to GBP30.7 million from GBP50.5 million. This was on trading profit that fell 12% to GBP57.8 million from GBP65.8 million.
Grocery trading profit fell 18% to GBP64.3 million, due to lower volumes, which led to reduced operational leverage, and a lower divisional contribution.
Sweet Treats trading profit rose 40% to GBP12.7 million, as volumes including of Mr Kipling and Cadbury Cake were less affected by the exceptional consumer buying trends during the pandemic last year.
Revenue for the recent period dropped 6.5% year-on-year to GBP394.1 million from GBP421.5 million, driven largely by a fall in Grocery due to the non-repeat of last year's exceptional volumes.
Looking ahead, Premier Foods has entered the second half with strong momentum, its said, with new brand plans and an expansion into more new categories. The group expects to benefit from lower interest costs as a result of refinancing, and is on-track to meet profit expectations for the full year.
"As we look ahead to the second half of the year, we will be launching a range of insight driven new products and supporting six of our key brands with advertising. We will expand our presence in adjacent new categories, building on the initial success of Cape Herb and Spice and Oxo Rubs & Marinades, as well as bringing to market premium Mr Kipling biscuits and a range of branded Ice cream. We will also continue to develop our overseas businesses including the full roll-out of Mr Kipling in Canada and the test launch of Mr Kipling in the USA," said Chief Executive Officer Alex Whitehouse.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Premier Foods (PFD)