Premier Foods reports solid third-quarter performance

(Sharecast News) - Premier Foods said in an update on Tuesday that it now expected full-year trading at the top end of guidance, as it reported a 3.1% increase in group sales for the third quarter ended 28 December, with branded sales rising 4.6%.

The FTSE 250 company said growth was driven by strong performance across key product categories, with grocery branded sales increasing by 3.5% and sweet treats branded sales rising by 8.9%.

It said it achieved continued volume-led growth, with branded volumes up by 7%, alongside further gains in both value and volume market share.

Strategic expansion in international markets contributed to a 29% increase in total sales across target regions.

New categories performed strongly, with sales rising by 38%, led by the success of Ambrosia porridge pots.

The firm's recently acquired brands, The Spice Tailor and FUEL10K, also delivered double-digit revenue growth, further supporting the company's broader growth strategy.

Premier Foods said it now expected trading profit for the full year to be at the upper end of its previously stated guidance range.

"We are pleased to report another very good quarter of volume led branded revenue growth, accompanied by further market share gains, as our branded growth model continues to deliver well for us," said chief executive officer Alex Whitehouse.

"Our sweet treats business had a particularly strong Christmas with branded sales up 8.9%; Mr Kipling sold 20% more mince pies this year, delivering its biggest ever quarter.

"Earlier this year, we said that consumers are starting to trade up and treat themselves more."

Whitehouse said that continued over Christmas, with the company's premium ranges such as Ambrosia Deluxe desserts, Bisto Best gravy and Mr Kipling Signature Brownie Bites performing strongly as it more than doubled the sales of its Mr Kipling Signature mince pies.

"Our acquired brands, The Spice Tailor and FUEL10K, both delivered double digit sales growth, as we leverage our product innovation capabilities and commercial relationships to unlock their potential.

"Ambrosia porridge pots and Cape Herb & Spice were standout performers of the 38% growth in new categories in the quarter, while all our target overseas regions delivered further strong progress as International sales increased 29%."

Alex Whitehouse said that, having delivered "very good" volume led, branded revenue growth in its key third quarter, the company was now guiding trading profit to the upper end of expectations for the financial year.

"As we look to the rest of the financial year and to the medium term, we expect to deliver further progress as we continue to execute against our five pillar growth strategy."

At 0820 GMT, shares in Premier Foods were up 4.47% at 187p.

Reporting by Josh White for Sharecast.com.

Premier Foods