(Alliance News) - Premier Foods PLC said Friday it has priced in 2026 fixed rate notes, which will result in a drop in financing costs - improving its profit.
The St Albans, England-based maker of Bisto gravy, Bird's custard and Mr Kipling cakes said it has priced the GBP330 million notes at 3.5%.
"This will result in a further GBP8 million per annum reduction in the group's financing costs and so increases its financial 2022 expectations for adjusted profit before tax," Premier Foods added.
The proceeds of the notes will be used to redeem the GBP300 million fixed rate notes due 2023.
Chief Financial Officer Duncan Leggett said: "The pricing of these notes at 3.5% further illustrates the substantial progress we have made in the last two years to strengthen our financial position. With now significantly improved leverage, our reduced levels of fixed debt and lower interest costs mean we are raising our expectations for adjusted pretax profit."
On Wednesday this week, Premier Foods declared a payout to shareholders after a 13-year break as earnings surged in its most recently ended financial year.
The company said revenue for the 53 weeks to April 3 was GBP947.0 million, an increase of 12% compared to the 52 weeks ended March 28. On a comparable 52-week basis, revenue increased by 10%.
The FTSE 250-listed company reported trading profit of GBP151.3 million for the year. On a 52-week basis, it was 12% higher year-on-year, reflecting strong growth in the Grocery business, partly offset by a reduction in Sweet Treats division.
Pretax profit totalled GBP122.8 million in financial 2021, doubled from GBP53.6 million the year before.
Shares in Premier Foods closed 0.8% higher in London on Friday at 101.80 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com;
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Premier Foods (PFD)