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.


Unlock this article instantly by logging into your account

Don’t have an account? Register for free and we’ll get out your way


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 a food company. The Company is engaged in the manufacture and distribution of branded and own label food and beverage products. The Company's segments include Grocery, Sweet Treats and International. The Grocery segment primarily sells savory ambient food products. The Sweet Treats segment sells sweet ambient food products. The International segment has been aggregated within the Grocery segment for reporting purposes. The Company offers a range of brands, such as Ambrosia, Bisto, OXO, Paxo, Sharwood's, Loyd Grossman, Homepride, Batchelors, Smash, Bird's, Paul Hollywood, Marvel and Angel Delight. Its Grocery strategic business unit (SBU) includes cooking sauces and accompaniments, flavors and seasonings, Quick meals and soups, and ambient desserts. Its Sweet Treats SBU includes the Company's cake brands, such as Mr. Kipling, Cadbury and Lyons. Its International SBU is focused on new markets across the world. more »

LSE Price
Mkt Cap (£m)
P/E (fwd)
Yield (fwd)

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

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

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

Let’s get you setup so you get the most out of our service
Done, Let's add some stocks
Brilliant - You've created a folio! Now let's add some stocks to it.

  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
Save and show me my analysis