Premier Foods – why I bought

Monday, Nov 05 2012 by

Premier Foods (LON:PFD) is a food producer owning such brands as Ambrosia, Bachelors, Bisto, Hovis, Lloyd Grossman, Mr Kipling, OXO ans Sharwoods (the real money-earning “power brands”), and a “bunch of other stuff”.

Over-expansion over a number of years has left PFD in a perilous debt situation. The old guard was kicked out, and Michael Clarke was appointed new CEO in July 2011. The strategy is to concentrate and build the power brands, run the whole operations more efficiently, sell non-core brands, and reduce debt,

Clarke is delivering on his plan, and disposals are ahead of the schedule required by new banking agreements. Food Manufacturer reported that grocery and Power Brands were up 4.1%, and there have been cost reductions of £20m. ThisIsMoney also reported that PFD is in talks to break into the US market.

Although the debt situation has improved since the last reported accounts, at the interim stage net debt to market cap is about 5:1 – so clearly a high-risk, high-reward play. The company operates in a fairly defensive business line though, debt is being reduced, and the turnaround is beginning to bear fruit.

I’m sticking my neck out on this one.


About the Author's Blog

Mark Carter Profile Image Promotional
Mark Carter's Blog

Investment blog of an amateur private investor. The blog also contains non-investment related posts. more or visit website »


As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.

Do you like this Post?
5 thumbs up
0 thumbs down
Share this post with friends

Premier Foods plc is an United Kingdom-based company engaged in food manufacturing, processing and distribution. The Company operates in three segments: Grocery, Bread and Disposed of Canning Operations. The Grocery segment sells ambient food products. The Bread segment sells bread, morning goods, flour products and frozen pizza bases. The Disposed of Canning Operations segment sold canned goods. The Company’s subsidiaries include Premier Foods Group Limited, Premier Foods Group Services Limited and Premier Foods Investments Limited. more »

Share Price (Full)
-1.0  -2.3%
P/E (fwd)
Yield (fwd)
Mkt Cap (£m)

  Is Premier Foods fundamentally strong or weak? Find out More »

What's your view on this article? to Comment Now

You are feeling neutral

Use the £ sign in front of a ticker to turn £VOD into Vodafone PLC

You can track all @StockoChat comments via Twitter

About Mark Carter

Mark Carter


I am a private investor living in Scotland. I am a computer programmer by trade.

Stock Picking Tutorial Centre

Related Content

Interesting results
Interesting results
Premier Foods 23rd Apr '13

How to avoid investing in distressed stocks
How to avoid investing in distressed stocks
Premier Foods 10th Nov '11

poundFIF Major Customers
£FIF Major Customers
Finsbury Food 29th Jan

Stock Picking Simplified

Stockopedia takes your stock picking to the next level with cutting edge Stock Reports & Screening tools.

Get started
or Take a Tour to find out more.