Suspension of pension deficit payments

Premier Foods is pleased to announce that it has reached agreement with the RHM Pension Scheme Trustee to suspend pension deficit contribution payments from 1 April 2024. This suspension of future contributions is taking place earlier than originally expected, reflecting the strong performance of the pension scheme, following the segregated merger in June 2020.

As a result, the Group will benefit from £33m increased free cash flow for the financial year ending 29 March 2025, and subject to the results of the next triennial valuation, the Group anticipates no further contributions to be payable after this date. Administration costs associated with running the pension scheme of c.£5 million per annum and the dividend match mechanism are currently unchanged.

Duncan Leggett, Chief Financial Officer, said: “The further significant progress in the funding position of the pension scheme has enabled us to take another important step to expected full resolution of the Scheme by the end of 2026. This suspension of pension payments substantially increases the free cash flow available to us and presents us with enhanced capital allocation options to deliver on our growth ambitions. The Scheme has reached this position following strong stewardship by the Trustee over many years and we will continue to work collaboratively with them to further de-risk the Scheme.”

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”).

To view the RNS and further details, please refer to the Regulatory News section.