Preliminary results for Premier Foods for the 52 weeks ending 1st April 2023

18/05/2023 : Headlines:

• Full year Branded revenue up +9.1%; Q4 Branded revenue up +15.9%
• Total Grocery revenue up +15.3%, Sweet Treats revenue up +2.7%
• Grocery market share increased +64bps compared to prior year
• Trading profit +11.5%, ahead of upgraded guidance
• Trading profit margins in line with last year as input cost inflation offset by cost savings and increased pricing
• International revenue growth up +10% with record market share for Mr Kipling in Australia
• New categories revenue increased +33% led by early success with Ambrosia porridge pots
• Accelerated revenue growth of The Spice Tailor post acquisition; 12 month revenue +25%
• Pensions cash contributions NPV reduced by c.50% to c.£125m and cash costs reduced by £6m from FY23/24
• FY23/24 expectations for another good year unchanged

Alex Whitehouse, Chief Executive Officer

“Once again, the business has delivered a year of strong performance in a challenging environment with Group Revenue increasing by 11.8%. Our brands grew strongly, up 9.1%, underpinned by our branded growth model and supported by higher pricing. Trading profit increased by 11.5%, maintaining margins versus a year ago, as we successfully offset exceptionally high input cost inflation through a combination of cost efficiencies and pricing.

“Additionally, we continued to make very good progress against all our strategic objectives; our brands in the UK grew by 7.5%, with the Grocery brands further increasing market share; revenues from new categories this year increased by 33% and we achieved a record market share for Mr Kipling in Australia. We made our first acquisition in 15 years, The Spice Tailor brand, which is already delivering accelerated sales growth as we apply our proven branded growth model. Even after this transaction, we reduced Net debt by over £10m, lowering Net debt/adjusted EBITDA to 1.5x, in line with our medium-term target. With a much stronger balance sheet, we are pleased to propose an increase in the dividend of 20% again this year. Additionally, we have today announced a further 50% reduction in the net present value of our pension contributions and a reduction in annual cash contributions of £6m.

“We know that consumer budgets remain under pressure in the current environment and our broad portfolio of brands continue to provide great options to prepare and eat good value, delicious meals at home. We are continuing to see consumers looking for convenient, affordable and tasty meal solutions and Batchelors and Nissin were two of our best branded performers in the year which benefitted from this trend. Batchelors, well known for its tasty Super Noodles, has now become our largest Grocery brand, increasing revenues by over 20% this year.

“We will continue to pursue vigorously our five-pillar growth strategy and with our positive momentum, including a good start to Q1, we are well placed to make further progress this year, and our expectations remain unchanged.”

To read and download the RNS of our Preliminary Results for the 52 weeks ending 1 April 2023