(Alliance News) - Premier Foods PLC on Tuesday said that soaring profit in the first half of its financial year was driven by demand for its branded products as more people ate at home during the Covid-19 lockdown.
The Hertfordshire-based food producer said revenue for the half year ended September 26 was up 15% to GBP421.5 million from GBP366.7 million a year prior.
Pretax profit soared to GBP50.5 million from GBP15.0 million a year before.
Chief Executive Alex Whitehouse said: "We have seen many more meal occasions being consumed at home, particularly in the first quarter, followed by a transition towards more normal levels of demand through quarter two."
Net debt to earnings before interest, tax, depreciation amortisation ratio was reduced to 2.3 times compared to 2.7 times six months earlier.
Net debt was cut to GBP403.1 million from GBP492.9 million a year before.
Whitehouse said: "In the first half of the year, demand for our branded product ranges has been exceptional, particularly in our Grocery businesses which have helped deliver strong profit growth, accelerated debt reduction and a lowest ever net debt/Ebitda ratio of 2.3x."
Going forward, Premier Foods expects to see continued revenue growth, driven by "driven by further new product innovation, strong commercial plans and increased marketing investment", the company said.
"We also now expect to see an increase in demand for our brands due to the impact of recently increased government restrictions on eating out. The longevity of this increased demand is likely to be linked to the duration of these new measures," Whitehouse said.
Premier Foods anticipates that trading profit for the full year will be ahead of current market expectations.
Premier Foods shares were down 4.9% at 97.65 pence each in London on Tuesday morning.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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Premier Foods (PFD)