- Premier Foods revealed its third-quarter turnover increased by 3.1% to £360.1m
- Kipling cakes in Australia helped drive a 29% uplift in Premier’s overseas sales
Premier Foods expects profits to hit the top end of forecasts after the Mr Kipling maker enjoyer bumper sales of confectionery goods over Christmas.
The food manufacturer’s turnover increased by 3.1 per cent to £360.1million in the 13 weeks ending 28 December, as sales of branded sweet treats jumped by 8.9 per cent.
Mr Kipling products were especially popular, with sales of its signature mince pies and brownie bites more than doubling as customers traded up to premium items.
Kipling cakes proved popular in Australia, encouraged by the launch of new ranges like flavoured Bakewell Tarts, which helped drive a 29 per cent uplift in Premier’s overseas sales.
Other high-selling brands included Indian condiments maker The Spice Tailor, which benefited from Diwali celebrations in Canada and the launch of East Asian sauce kits.
New product ranges also boosted demand for Loyd Grossman cooking sauces and Nissin noodles over the festive period.
Premier’s branded sales in its grocery division rose by 3.3 per cent to £232.4million, offsetting a 9.3 per cent drop in the segment’s non-branded turnover.
Alex Whitehouse, chief executive of Premier, said: ‘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.’
Premier Foods anticipates its trading profits will be at the ‘upper end’ of its £180.1million to £186.4million range.
Premier Foods shares rose 5.7 per cent to 189.2p on Tuesday morning, taking their gains over the past year to around 34 per cent.
Easing cost-of-living pressures have provided a significant boost for the FTSE 250 company as consumers feel more confident about switching purchases from own-label products to brands.
At the same time, Premier has undertaken several acquisitions, including The Spice Tailor and protein cereal brand FUEL10K.
Based in Dingwall, FUEL10K specialises in breakfast meals like porridge, granola and milk drinks; its products are stocked in major supermarkets such as Tesco, Asda and Sainsbury’s.
Premier has also slashed its debts, from £1.8billion in 2008 to £221.2million as of September, partly by selling some businesses and reforming its pension schemes.
Dan Lane, lead analyst at Robinhood, said: ‘Historically, debt has been a worry but Premier has seemingly turned a corner here and is addressing it well.’
However, Lane said improving inflation and interest rates may lead to an interested party ‘looking to snap up the company before any further positivity makes shares even more expensive.
‘Shares trading around 14x earnings aren’t currently likely to get in the way of a motivated buyer who thinks they could really accelerate US growth in particular.’
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