REG - Premier Foods plc Premier Foods Fin - Acquisition of FUEL10K

Premier FoodsAnnouncement

30/10/2023 07:15

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RNS Number : 6199R  Premier Foods plc  30 October 2023

30 October 2023

 

Premier Foods plc (the "Company" or the "Group")

 

 Acquisition of FUEL10K, accelerating expansion into Breakfast

Premier Foods today announces it has acquired FUEL10K, a vibrant Breakfast
brand, with a portfolio of granola, oats and drinks products, as the Group
significantly expands its presence in the Breakfast meal occasion.

 Strategic highlights & opportunities
 ·         FUEL10K is a differentiated, protein enriched Breakfast brand
 ·         On-trend proposition which attracts a predominantly young consumer demographic
 ·         Track record of strong double-digit revenue growth over the last three years
 ·         Substantially increases Group's position in the Breakfast category, building
           on success of Ambrosia porridge pots
 ·         The Group expects to unlock significant future value through leveraging its
           proven branded growth model
 ·         FUEL10K's commitment to sustainability supports the Group's purpose of
           Enriching Life Through Food

 

 Alex Whitehouse, Chief Executive Officer

 

"The acquisition of FUEL10K follows on from our successful integration of The
Spice Tailor, where we have increased revenue and profit through the
application of our branded growth model. FUEL10K provides us with an ideal
platform to accelerate our expansion into the Breakfast category, building on
our recent successful launch of Ambrosia porridge pots. Possessing a
differentiated category position, with its protein enriched product range and
appealing to a younger demographic, we expect to deliver significant further
profitable growth of FUEL10K through the deployment of our successful branded
growth model."

 
,

 Barney Mauleverer, co-founder, FUEL10K

 

"We are very excited to be passing the reigns on to the owner of such a great
stable of UK brands. Having built the foundations from start-up, the FUEL10K
brand is now primed to accelerate into the future and achieve even more great
things. I could not think of a better custodian of our brand than Premier
Foods to entrust what we have begun and make the most of such a great
opportunity."

 

 

 Transaction details
 ·         Premier Foods has acquired 100% of FUEL10K(,1) for an Enterprise Value of
           £34.0m, equivalent to an EV/sales multiple of c.1.6x on revenues(2) of
           c.£21m
 ·         Initial consideration of £29.6m funded through available cash reserves
 ·         A minimum further deferred consideration of £4.0m will be payable in FY26/27,
           with any increment to this dependent upon certain growth targets(3)
 ·         Earnings accretive(6) in first full year
 ·         Post acquisition, the Group's FY23/24 Net debt/EBITDA is expected to be lower
           than FY22/23
 ·         The transaction completed on 29 October 2023

 

 

Further information on the transaction can be found in an investor
presentation on our website at

https://www.premierfoods.co.uk/Investors/Results-Centre/2023-2024.aspx

 

~ Ends ~

 

About Premier Foods

As one of the UK's largest food businesses, we're passionate about food and
believe each and every day we have the opportunity to enrich life for
everyone. Premier Foods employs over 4,000 people operating from 15 sites
across the country, supplying a range of retail,
wholesale, foodservice and other customers with our iconic brands which
feature in millions of homes every day.

 

Through some of the nation's best-loved brands, including Ambrosia,
Batchelors, Bisto, Loyd Grossman, Mr. Kipling, Oxo and Sharwood's, we're
creating great tasting products that contribute to healthy and balanced diets,
while committing to nurturing our people and our local communities, and going
further in the pursuit of a healthier planet, in line with our Purpose of
'Enriching Life Through Food'.

 

About FUEL10K

FUEL10K make fuel for busy people, with a protein enriched Breakfast range
which make mornings easier, tastier and more nutritious. The portfolio
includes a range of granola, oats and drinks products which can be eaten at
the Breakfast table or on the go. FUEL10K is sold in the UK in all major
retailers, convenience channels and online and attracts a young demographic
who need fuel to power them through the day. A fast growing Breakfast brand,
FUEL10K was acquired by Premier Foods on 29 October 2023.

 

Contacts:

 

Institutional investors and analysts:

Duncan Leggett, Chief Financial Officer

Richard Godden, Director of Investor Relations

Investor.relations@premier (mailto:Investor.relations@premier) foods.co.uk

 

Media enquiries:

Sarah Henderson, Director of
Communications

 

Headland

 Ed Young    +44 (0) 7884 666830
 Jack Gault  +44 (0) 7799 089357

 

 

- Ends -

 

This announcement may contain "forward-looking statements" that are based on
estimates and assumptions and are subject to risks and uncertainties.
Forward-looking statements are all statements other than statements of
historical fact or statements in the present tense, and can be identified by
words such as "targets", "aims", "aspires", "assumes", "believes",
"estimates", "anticipates", "expects", "intends", "hopes", "may", "would",
"should", "could", "will", "plans", "predicts" and "potential", as well as the
negatives of these terms and other words of similar meaning. Any
forward-looking statements in this announcement are made based upon Premier
Foods' estimates, expectations and beliefs concerning future events affecting
the Group and subject to a number of known and unknown risks and
uncertainties. Such forward-looking statements are based on numerous
assumptions regarding the Premier Foods Group's present and future business
strategies and the environment in which it will operate, which may prove not
to be accurate. Premier Foods cautions that these forward-looking statements
are not guarantees and that actual results could differ materially from those
expressed or implied in these forward-looking statements. Undue reliance
should, therefore, not be placed on such forward-looking statements. Any
forward-looking statements contained in this announcement apply only as at the
date of this announcement and are not intended to give any assurance as to
future results. Premier Foods will update this announcement as required by
applicable law, including the Prospectus Rules, the Listing Rules, the
Disclosure and Transparency Rules, London Stock Exchange and any other
applicable law or regulations, but otherwise expressly disclaims any
obligation or undertaking to update or revise any forward-looking statement,
whether as a result of new information, future developments or otherwise.

 

Notes to editors:

 

 1.        The Group has acquired 100% of the shares of FUEL10K Limited on a cash and
           debt free basis
 2.        Projected revenue to the year ended 31 March 2024
 3.        Additional consideration above the Enterprise value of £34.0m is dependent on
           future sales growth to FY25/26 and subject to a maximum cap of total
           consideration (comprising initial consideration and additional consideration)
           of £55.0m. The maximum cap reflects a stretching revenue target.
 4.        For year ended 31 March 2023, FUEL10K reported Profit before tax of £0.5m; as
           at 31 March 2023, Gross Assets were £5.1m
 5.        There are no further conditions to be fulfilled post completion of the
           transaction
 6.        Expected to be Adjusted earnings per share ("eps") accretive in year one.
           Adjusted eps is defined as Adjusted profit after tax divided by the weighted
           average number of shares in the period. Adjusted profit after tax is defined
           as Adjusted profit before tax less a notional tax charge of 25.0%. Adjusted
           profit before tax is defined as Trading profit less net regular interest.
           Trading profit is defined as profit/(loss) before tax, before net finance
           costs, amortisation of acquired intangibles, fair value movements on foreign
           exchange and other derivative contracts, net interest on pensions and
           administration expenses. Net regular interest is defined as net finance cost
           after excluding write-off of financing costs, early redemption fees, other
           interest payable and other finance income.

 

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