In its interim management statement, Hovis maker Premier Foods Plc (LON:PFD) said brands continue to grow volumes and gain market share in a challenging environment. One of the UK's leading food companies, Premier Foods manufactures foods and drink products like Cadbury Drinking Chocolate and Branston. As well as owning some of the UK's most popular food brands, its also manufactures hundreds of products that cater for the food service industry and supplies retailer branded products to the UK's major food retailers.
According to the latest announcement, Drive brands sales were up 3.4% in the three months to end-March 2010, while total branded sales value was down 0.3%. Non-branded sales were down 12.9%. Total group sales were down 5.1% and total branded volumes up 2.2%. Net debt is expected to fall by £100m year on year in the first half. The full year outlook remains unchanged. The Hovis brand continued its progress with year on year sales value growth of 4.7% and volume growth of 8.5% supported by conversion of the entire Hovis range to 100% British Wheat. Hovis value market share in the quarter at 25.6% was 0.5 ppts higher than the same period last year. Grocery Drive brands grew sales value by 5.0% with strong performances from Hartley's and Sharwoods. Grocery's Core and Defend brand sales declined by 1.1% and 5.0% respectively. Amongst the Core brands, Oxo and Bisto recorded lower sales as a result of reduced promotional activity compared to the prior year.
Robert Schofield, CEO, said:
"We are pleased that our brands have continued to gain volume market share with volumes of our Drive brands up 6.6%. Trading conditions, however, remain challenging with promotional activity across the market continuing at elevated levels. Non-branded sales were lower primarily due to promotional activity by brands, the effect of contract exits in 2009 and flour deflation. We expect an improving trend for non-branded sales through the year as contract exits and flour deflation drop out of the comparatives and recent contract wins come into effect.
"We are progressing well on our strategic cost reduction targets of delivering procurement savings and improving manufacturing efficiency. Our cash generation is in line with our targets and net debt should fall by £100m year on year in H1. We reiterate our guidance of earlier this year that, assuming no adverse change in the consumer and trading…
