REG - Premier Foods plc Premier Foods Fin - Preliminary Results
15/05/2025 07:00
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RNS Number : 7319I Premier Foods plc 15 May 2025
15 May 2025
Premier Foods plc (the "Group" or the "Company")
Preliminary results for the 52 weeks ended 29 March 2025
Strong branded volume growth, Trading profit ahead of expectations and step up
in dividend
Headline results* (£m) FY24/25 FY23/24 change
Headline Revenue(1) 1,147.8 1,108.7 3.5%
Headline branded Revenue(1) 1,008.1 958.1 5.2%
Headline Trading profit(2) 187.8 177.2 6.0%
Adjusted profit before taxation(5) 169.3 155.6 8.8%
Adjusted earnings per share(8) (pence) 14.5 13.5 7.3%
Net debt(12) 143.6 235.6 £92.0m lower
Statutory measures (£m) FY24/25 FY23/24 change
Revenue (includes Charnwood & Knighton prior to exits) 1,149.0 1,137.5 1.0%
Profit before taxation 161.3 151.4 6.5%
Profit after taxation 124.9 112.5 11.0%
Basic earnings per share (pence) 14.3 13.0 10.0%
Dividend per share (pence) 2.8 1.728 62.0%
Alternative performance measures above are defined below and reconciled to
statutory measures throughout.
* Headline results presented for both periods exclude effect of Charnwood
& Knighton site closures; Headline revenue is stated at constant currency
Statutory measures include Charnwood & Knighton results prior to closure
Strong financial performance
· Branded revenue(1) up 5.2% due to strong branded volume growth;
total headline revenue(1) up 3.5%
· Total Headline Grocery branded revenue(1) up 4.6%, Sweet Treats
branded revenue up 7.3%
· Market share(14) gains in both volume, up 80bps and value, up
21bps
· Headline Trading profit ahead of expectations and up 6.0% versus
prior year
· Adjusted profit before taxation up 8.8% at £169.3m
· Profit after taxation up 11.0%; basic earnings per share up 10.0%
to 14.3 pence
· Net debt £92.0m lower than last year and Net debt/EBITDA reduced
to 0.7x
· Agreed full pensions merger and removal of dividend match; on
track to achieve full resolution by end of 2026
· Dividend stepped up 62% to 2.8 pence, as previous match to
pension scheme redeployed into dividend
Good progress on strategic priorities
· UK branded revenue(1) up 4.4%; volume-led from consistent
execution of branded growth model
· Capital investment increased by 26% to £41.4m, in line with
strategy, driving efficiencies & capacity expansion
· New categories revenue up 46% with good progress across all
initiatives
· International revenue up 23%(9); double-digit revenue growth in
all target regions
· The Spice Tailor and FUEL10K both delivered double-digit revenue
growth
Alex Whitehouse, Chief Executive Officer
"The business has delivered another strong year, with branded revenue growth
up 5.2%, exceeding £1 billion, and driven by particularly good volumes which
resulted in us taking further market share. With this strong branded
performance, Trading profit grew 6% compared to last year, exceeding our
previously raised expectations."
"Our premiumisation strategy continues to be highly relevant, reflecting the
trend for consumers to trade up and treat themselves to ranges such as our
Ambrosia Deluxe and Mr Kipling Signature Bites, both of which delivered very
strong revenue growth this year. Our Nissin noodles again achieved
double-digit sales growth, taking yet more market share and benefitted from
the addition of big pots and Demae Ramen to the range."
"In addition to the strong financial performance, we have also made progress
against all the pillars of our growth strategy; we significantly increased
capital investment in our manufacturing sites this year, delivering improved
efficiencies and providing the platform for future growth. Our revenue in new
categories rose by 46%, led by Ambrosia porridge pots and we also grew our
overseas businesses by 23%(9). Additionally, and as we apply the benefits of
our branded growth model, our acquired brands, The Spice Tailor and FUEL10K,
both delivered double-digit sales growth this year and remain well-set for
significant future growth."
"We have now reduced our leverage to below 1x adjusted EBITDA(4), reflecting
the strong cash generating capacity of our business and the suspension of
pension deficit contribution payments. We are one step further towards the
full resolution of the pension scheme and with the removal of the dividend
match we are stepping up our distribution to shareholders this year with a 62%
increase in the dividend."
"As we look ahead to the coming year, we expect revenue growth to be supported
by a strong product innovation programme and our expectations for Trading
profit growth are unchanged. In line with our capital allocation framework, we
will continue to invest in projects to both increase efficiencies and
automation and facilitate growth through product innovation and capacity while
we also remain focused on pursuing M&A opportunities where we can add
value to brands through the application of our branded growth model."
Dividend
Subject to shareholder approval, the directors have proposed a final dividend
of 2.8 pence per share in respect of the 52 weeks ended 29 March 2025
(FY23/24: 1.728p), payable on 25 July 2025 to shareholders on the register at
the close of business on 27 June 2025. This represents a 62.0% increase in the
dividend paid per share compared to FY23/24, is 54.7% ahead of adjusted
earnings per share growth, and reflects redeployment of funds to shareholders
following the removal of the dividend match to the Group's pension scheme. The
ex-dividend date is 26 June 2025.
Outlook
The Group expects revenue growth this year to be more equally balanced between
volume and price/mix as it continues to leverage the strength of its Branded
Growth Model. Additionally, it expects to deliver further progress against its
strategic pillars this year, with expectations for Trading profit growth
unchanged. In light of the Group's balance sheet and strong cash generation,
the Group expects to increase capital investment again this year in order to
deliver attractive returns while also continuing to actively explore M&A
opportunities.
Enhanced capital allocation opportunities
The Group is highly cash generative and benefits from strong EBITDA margins in
line with the global branded food sector.
In March 2024, the Group announced the suspension of pension deficit
contribution payments, which historically has consumed a significant
proportion of cash. This frees up increased free cash flow and presents
enhanced options for the Group to accelerate its growth ambitions. The Group's
priorities for capital allocation are unchanged and are summarised as follows:
1. Capital investment: To increase efficiency and automation at our manufacturing
sites and facilitate innovation driven growth through new plant line
investment.
2. M&A: Continue to pursue branded assets which would benefit from the
application of the Group's branded growth model. We will maintain our
financial discipline on M&A, applying a similar approach as to the recent
acquisitions of The Spice Tailor and FUEL10K, with a focus on Return on
Invested Capital.
3. Dividends: Expect to pay a progressive dividend, growing ahead of earnings,
and have rebased the dividend following removal of the match to the pension
scheme.
The Group's Net debt/EBITDA leverage target of 1.5x remains unchanged.
Environmental, Social and Governance (ESG)
The Group's 'Enriching Life Plan'(17), encompasses the three strategic pillars
of Product, Planet and People, with good progress reported in FY24/25 against
each of these pillars. In Product, revenue from products with a high
nutritional standard(18) increased by 9% in the year, aided by reformulation
of our FUEL10K Granola products, meaning the FUEL10K breakfast cereal range is
now non-HFSS (non-high in fat, salt and sugar). Products in the portfolio
which are now classified as having a regulated health or nutrition benefit and
are of a high nutritional standard(18) is now 45%, an increase on last year.
Further strong progress was again made in the Planet pillar, with a 10%
reduction in Scope 1 and 2 carbon emissions, reflecting a range of efficiency
and investment programmes and the adoption of renewable energy. Over the last
three years, the Group has reduced Scope 1 and 2 carbon emissions by 30%. In
the People pillar, the Group's partnership with FareShare has facilitated the
donation of over 1 million meals in a year for the first time, and increased
20% compared to last year. The proportion of women holding management grade
roles is now 48%, up from 46.4% a year ago.
Strategy overview
The Group's five pillar strategy drives growth and creates value, as outlined
below.
Pillar Strategy Overview FY24/25 Delivery/result
1. Continue to grow the UK core business Our Branded Growth Model leverages our leading category positions, launching UK branded revenue growth of 4.4%(1)
new products to market driven by consumer trends, supporting our brands with
sustained levels of marketing investment and fostering strong customer and
retailer partnerships.
2. Supply chain investment Investing in operational infrastructure to increase efficiency and Capital investment £41.4m, up 26%
productivity providing a virtuous cycle for brand investment. Also includes
new kit to facilitate growth through our innovation strategy and enhances the
safety and working conditions of our colleagues.
3. Expand UK business into new categories Leverage the strength of our brands, using our proven branded growth model to Revenue growth of 46%
launch products in adjacent, food categories, outside the Group's core.
4. Build international businesses with critical mass Building sustainable business units overseas with critical mass, applying Revenue growth of 23%(9)
brand building capabilities to deliver growth in target markets of Australia
& New Zealand, North America and EMEA. Brands which currently drive this
expansion are Mr Kipling, Sharwood's and The Spice Tailor.
5. Inorganic opportunities Branded acquisitions to drive significant value through the application of our The Spice Tailor and FUEL10K achieved double-digit revenue growth in FY24/25
branded growth model, while maintaining strict financial discipline.
Further information
A presentation to equity and bond investors and analysts will be webcast today
at 9:00am BST.
To register for the webcast follow the link:
www.premierfoods.co.uk/investors/investor-centre
(http://www.premierfoods.co.uk/investors/investor-centre)
A recording of the webcast will be available on the Company's website later in
the day.
A factsheet providing an overview of the Preliminary results is available at:
www.premierfoods.co.uk/investors/results-centre
(http://www.premierfoods.co.uk/investors/results-centre)
A Premier Foods image gallery is available using the following link:
www.premierfoods.co.uk/media/image-gallery/
(http://www.premierfoods.co.uk/media/image-gallery/)
As one of Britain's largest food producers, 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 13 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'.
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:
Lisa Kavanagh, Director of Corporate Affairs
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.
Financial results
Overview
£m FY24/25 FY23/24 % change % change
(@ actual rates) (@ constant currency)
Branded revenue(1) 1,008.1 958.1 5.1% 5.2%
Non-branded revenue(1) 139.7 150.6 (7.2%) (7.2%)
Headline revenue(1) 1,147.8 1,108.7 3.4% 3.5%
Divisional contribution(3) 264.8 251.2 5.4% -
Headline Trading profit(2) 187.8 177.2 6.0% -
Headline Trading profit margin(2) 16.4% 16.0% +0.4ppt -
Adjusted EBITDA(4) 213.2 201.6 5.8% -
Adjusted profit before taxation(5) 169.3 155.6 8.8% -
Adjusted earnings per share(8) (pence) 14.5 13.5 7.3% -
Basic earnings per share (pence) 14.3 13.0 10.0% -
Headline revenue(1) in FY24/25 increased by 3.5% to £1,147.8m, driven by
Branded revenue which grew by 5.2%. Divisional contribution was up 5.4% to
£264.8m and headline Trading profit increased by 6.0% to £187.8m. Group and
corporate costs were £77.0m (FY23/24: £74.0m), the movement largely due to
general salary inflation and IT investment.
Adjusted profit before taxation increased by £13.7m, or 8.8% to £169.3m,
while adjusted earnings per share grew by 7.3%. Basic earnings per share for
FY24/25 rose 10.0% to 14.3p (FY23/24: 13.0p).
Statutory overview
£m FY24/25 FY23/24 % change
Grocery
Branded revenue 773.3 740.4 4.5%
Non-branded revenue 76.9 110.0 (30.1%)
Total revenue 850.2 850.4 0.0%
Sweet Treats
Branded revenue 233.8 217.7 7.3%
Non-branded revenue 65.0 69.4 (6.3%)
Total revenue 298.8 287.1 4.0%
Group
Branded revenue 1,007.1 958.1 5.1%
Non-branded revenue 141.9 179.4 (20.9%)
Statutory revenue 1,149.0 1,137.5 1.0%
Profit before taxation 161.3 151.4 6.5%
Basic earnings per share (pence) 14.3 13.0 10.0%
The table above is presented including revenue from Knighton Foods.
Group revenue on a statutory basis was £1,149.0m, a 1.0% increase on FY23/24,
as Branded revenue growth of 5.1% was partly offset by non-branded decline of
20.9%, principally due to contract exits associated with the closure of
Charnwood/non-branded pizza bases. Grocery revenue of £850.2m was in line
with the prior year with branded revenue up 4.5% and non-branded revenue 30.1%
lower. Sweet Treats revenue increased 4.0% to £298.8m; commentary is provided
in the Trading performance section below.
Trading performance
Grocery
£m FY24/25 FY23/24 % change % change
(@ actual rates) (@ constant currency)
Branded revenue(1) 774.3 740.4 4.5% 4.6%
Non-branded revenue(1) 74.7 81.2 (8.0%) (8.0%)
Total headline revenue(1) 849.0 821.6 3.2% 3.3%
Divisional contribution(3) 229.4 217.5 5.5% -
Divisional contribution margin(3) 27.1% 26.5% +0.6ppt -
On a headline basis, Grocery branded revenue(1) increased by 4.6% in the year
to £774.3m, partially offset by an intentional reduction in non-branded
revenue meaning total headline revenue(1) grew by 3.3% to £849.0m. Total UK
branded revenue growth was 4.4% this year; volume growth was broad based and
consistent, up 8%, reflecting both continued delivery of the Group's branded
growth model alongside sharper promotional price points compared to the prior
year. The Group gained volume share and broadly held value share(14) in its
Grocery categories across the year, as its leading brands continue to
demonstrate their strength and resilience in what has been a challenging
consumer environment. Non-branded revenue declined as a result of contract
exits and lower volumes. Divisional contribution increased by 5.5% to £229.4m
this year, with margins of 27.1%, reflecting positive mix benefits from the
stronger branded revenue performance.
The Group's well established model of generating value is through leveraging
the strength of its market leading brands, launching insightful new products,
investing in its brands through emotionally engaging advertising and building
strategic retail partnerships with customers.
A broad range of new products were launched in the Grocery business during the
year, including Sharwood's cooking sauce kits, Bisto sausage gravy and Loyd
Grossman Pesto and Tomato & Mascarpone cooking sauces. The Ambrosia Deluxe
range also continued to perform very well, growing 45%, tapping into the
indulgence consumer trend, and benefitting from out of home media brand
investment during the year.
Many of the Group's Grocery brands were advertised in the year using both
television advertising but also increasingly leveraging a broader range of
mediums including outdoor media and digital. Brands which used the former
included Ambrosia, Sharwood's and FUEL10K. The Ambrosia media highlighted the
increasingly successful Deluxe range which plays to the indulgence consumer
trend while FUEL10K benefitted from advertising for the first time. Also new
this year was the launch of a fresh new OXO family TV advertisement,
highlighting how a young chef livens up a family meal with OXO Stock pots.
Examples of brands which used digital media in the year include The Spice
Tailor and FUEL10K.
The Group develops and maintains strategic and collaborative partnerships with
customers to maximise category growth and deliver all year-round, highly
visible, instore execution of its product portfolio. This year, the Group has
been particularly successful in accelerating the levels of display in the
breakfast category, as it leverages the high growth ranges of Ambrosia
porridge pots alongside the broader FUEL10K product range, achieving impactful
end of aisle displays. Meanwhile, Bisto teamed up with Wallace & Gromit
with promotional on pack prizes to win. Additionally, distribution points(20),
a measure of shelf availability in major retailers, has increased again, with
501bps gain of distribution in Grocery categories in the second half of the
year, meaning more of the Group's products are available in more stores.
Nissin noodles enjoyed another impressive year of volume-led revenue growth
and in terms of revenue, it has now surpassed OXO in size. The Group began
distribution of the Demae Ramen product range in the year, expanded the big
pot range it launched last year and continued to gain market share, further
extending its leadership of the authentic noodles category.
Revenue from expanding into new categories grew by 46% this year, with all
initiatives growing strongly year on year. Ambrosia Porridge pots added a
fifth flavour variant, Sweet Cinnamon, during the year and also expanded
retailer distribution, with this expected to build further in FY25/26. It also
benefitted from inclusion in mainstream Ambrosia TV brand advertising and
market share(15) of the category increased to 13%. Cape Herb & Spice
increased availability of its range in major retailers and introduced new
flavours such as Greek Style Lemon & Herb. Ice-cream increased sales as
well, introducing a new Mr Kipling caramel tart flavour and has plans for
further range extensions in the coming year.
Recently acquired brands The Spice Tailor and FUEL10K both delivered
double-digit % revenue growth in FY24/25. The Spice Tailor extended further
beyond its Indian cuisine heartland in the year, with the launch of Chinese
kits including Spicy Kung Po and Fiery Szechuan and East Asian kits such as
Japanese Teriyaki. Instore execution has been elevated this year, with The
Spice Tailor displayed on end of aisle displays alongside the Sharwood's brand
portfolio to deliver increased visibility and sales. Additionally, the brand
has benefitted from digital media during the year. Activity for next year
includes the launch of pad thai noodles and authentic poppadoms.
FUEL10K has delivered strong progress as a result of applying all elements of
the Group's branded growth model in its first full year of ownership with the
Group. The brand's Chocolate Granola became the leading Granola product in its
category, brand investment included out of home media for the first time and
instore display was significantly enhanced alongside Ambrosia porridge. There
is a deep product innovation pipeline, which includes protein bowls, protein
enriched noodle pots and high protein soups.
In the fourth quarter, Grocery headline revenue increased by 1.1%, with
branded growth of 1.9% and non-branded revenue 7.4% lower. This run rate
reflects the anniversary of commencing sharper promotional price activity,
which delivered strong volume growth in the same quarter a year ago.
Sweet Treats
£m FY24/25 FY23/24 % change % change
(@ actual rates) (@ constant currency)
Branded revenue 233.8 217.7 7.3% 7.3%
Non-branded revenue 65.0 69.4 (6.3%) (6.3%)
Total headline revenue(1) 298.8 287.1 4.0% 4.0%
Divisional contribution(3) 35.4 33.7 5.0% -
Divisional contribution margin(3) 11.9% 11.7% 0.2ppt -
Sweet Treats branded headline revenue increased by 7.3% in the year, partially
offset by non-branded revenue, so total headline revenue grew 4.0%. Divisional
contribution increased to £35.4m in Sweet Treats, and margins increased
slightly to 11.9%, a 20 basis point improvement on last year supported by
strong volume growth. The Group delivered strong market share gains, as it
continues to execute its proven branded growth model.
Branded volumes were strong throughout FY24/25, reflecting strong execution of
the Branded growth model, alongside sharper promotional price points across
both Mr Kipling and Cadbury cake. Mr Kipling's Signature premium ranges
performed very well; Brownie Bites grew by 78%, best ever mince pies doubled
revenue through expanded distribution and indulgent chocolate and caramel
layer cakes were launched to market. This performance again demonstrates the
premiumisation consumer trend seen in the UK market. In the second half of the
year, Mr Kipling also introduced Birthday cake tarts and Strawberry &
Cream tarts which have had a very strong start and Strawberry & Cream
French Fancies. Brand investment for Mr Kipling increased in the year, with
further television advertising featuring its 'Piano' advert, in addition to
upweighted out of home media focused on communicating the premium Signature
range.
Cadbury cake grew volumes and revenue consistently during FY24/25; Caramel
Mini Rolls were launched in the second half which supported strong performance
across the core range. During the year, the Group extended the licence it
holds with Mondelēz Europe GmbH to manufacture and sell Cadbury cake and
ambient desserts through to 2028.
Non-branded revenue declines were due to contract exits of French Fancies in
the first half of the year, and Swiss Rolls in the second half and consumers
switching to our brands.
In quarter four, Sweet Treats revenue increased by 5.3%, with branded revenue
up 7.8% and non-branded revenue 12.5% lower.
International
Revenue overseas increased by 23%(9) compared to last year. Over the last five
years, the International business has more than doubled. In Australia and New
Zealand, revenue grew in FY24/25, with Mr Kipling, Cadbury cake and Sharwood's
cooking sauces all delivering growth through successful application of the
Group's branded growth model. Mr Kipling TV advertising was expanded to an
additional region utilising the popular 'Little Thief' advert during the year
while The Spice Tailor benefitted from mainstream TV advertising for the first
time in its history, airing in Australia in quarter four. The Spice Tailor
also launched new products including Vietnamese Ginger Chicken and Spicy
Butter Chicken while Sharwood's family sized cooking sauces contributed
strongly to market share gains in the year. Additionally, and as the Group
expands beyond its cake and cooking sauces heartland in this market, it
established a presence with Paxo Gravy this year, delivering encouraging
results in the second half.
North America revenue increased in the year, with a particularly strong
performance in Canada. Mr Kipling slices are now available in 1,000 Canadian
stores across four major retailers with Vanilla slices the strongest seller.
Distribution of The Spice Tailor across both US and Canada is now 2,500
stores, an increase during the year, with further distribution planned for
this and Sharwood's in FY25/26. Next year, the Mr Kipling brand will benefit
from an updated pack design for the US and Canadian markets, which will
accentuate the Britishness of the range.
Revenue in EMEA increased, reflecting new listings of The Spice Tailor range
compared to the prior year, while Cadbury cake grew strongly in the Middle
East due to the expansion of Cadbury Flake cake in the UAE and Kuwait. In the
Netherlands, Batchelors launched core ranges Super Noodles and Pasta n Sauce.
Operating profit
Operating profit was £181.1m in the year, an increase of £3.4m compared to
the prior year. Headline Trading profit(2) increased by £10.6m to £187.8m,
as described above, and brand amortisation of £20.5m was similar to FY23/24.
Net interest on pensions and administrative expenses was a credit of £19.8m,
£11.8m lower than FY23/24, due to an interest credit on the opening combined
surplus of the pension scheme of £28.8m, partly offset by £9.0m of
administrative expenses. The interest credit was £8.4m lower than the prior
year due to a lower opening combined surplus of the pension scheme.
Non-trading items(10) of £6.3m (FY23/24: £11.4m) were principally due to
costs associated with the closure of the Knighton and Charnwood manufacturing
sites.
Finance income and costs
Net finance cost was £19.8m in FY24/25, compared to £26.3m in the prior
year. Net regular interest(6) reduced by £3.1m to £18.5m, predominantly due
to an increase in interest receivable on bank deposits of £2.4m, reflecting
higher levels of cash held on deposit compared to the prior year. Interest on
the Group's Senior secured notes of £11.6m were, as expected, in line with
the prior year. Other finance costs payable was £2.2m lower compared to the
prior year due to lower non-cash charges on the unwind of long-term provisions
and remeasurement of contingent consideration related to acquisitions.
The Group completed the signing of a new five year £227.5m revolving credit
facility (RCF) during the year replacing its previous £175m facility. The new
agreement is on improved terms, attracting a margin(19) of 2.0% above SONIA.
Since 29 March 2025, the RCF has been increased to £282.5m, exercising an
accordian option on the facility.
Taxation
The tax charge for the year was £36.4m (FY23/24: £38.9m) and largely
reflected profit before taxation at the UK domestic income tax rate of 25% of
£40.3m, partly offset by adjustments to prior year periods of £3.1m and
losses not previously recognised now recognised of £2.2m. The Group is able
to offset a proportion of cash tax payable through available brought forward
losses. Following the suspension of pension deficit contributions effective 1
April 2024, which were allowable for tax, cash tax payable is expected to be
approximately £10m next year.
Earnings per share
£m FY24/25 FY23/24 % change
Operating profit 181.1 177.7 1.9%
Net finance cost (19.8) (26.3) 24.7%
Profit before taxation 161.3 151.4 6.5%
Taxation (36.4) (38.9) 6.4%
Profit after taxation 124.9 112.5 11.0%
Average shares in issue (million) 874.4 862.4 1.4%
Basic Earnings per share (pence) 14.3 13.0 10.0%
The Group reported profit before taxation of £161.3m in FY24/25, a 6.5%
increase on the prior year. Profit after taxation was £124.9m, up £12.4m and
basic earnings per share was 14.3 pence, an increase of 10.0%.
Cash flow
Net debt as at 29 March 2025 was £143.6m, a reduction of £92.0m compared to
the prior year. Net debt / Headline adjusted EBITDA reduced from 1.2x to 0.7x
during the year, as Headline adjusted EBITDA(4) increased by £11.6m, from
£201.6m to £213.2m.
Headline Trading profit in the year was £187.8m, as described above.
Depreciation plus software amortisation was £25.4m in the year, so Adjusted
EBITDA(4) was £213.2m, 5.8% higher than FY24/25. A £10.0m outflow of working
capital(21), was similar to the prior year, and due to slightly lower trade
creditors. Pension payments were £9.2m, of which administration costs
including government levies were £6.5m and £2.7m being the last monthly
payment of deficit contributions to the pension scheme (relating to March
2024), prior to suspension. A dividend match payment to the Group's pension
schemes of £5.0m was also made in the year. Non-trading items were £7.7m and
related to payments associated with closure of the Knighton and Charnwood
manufacturing sites.
On a statutory basis, cash generated from operating activities was £158.1m
(FY23/24: £121.7m) after deducting finance costs paid of £26.6m (FY23/24:
£23.9m), of which £3.8m was transaction costs related to the new Revolving
Credit Facility and finance income received of £6.0m (FY23/24: £3.6m).
Taxation paid of £9.9m in the period was an increase of £5.5m compared to
the prior year, principally due to the suspension of pension deficit
contributions which were allowable for tax.
Cash used in investing activities was £41.4m (FY23/24: £62.1m). Capital
investment (which represents purchases of property, plant and equipment and
purchases of intangible assets) increased from £32.8m in the prior year to
£41.4m in the current year. The prior year also included £29.3m relating to
the acquisition of FUEL10K. As part of the Group's strategy to invest in
manufacturing infrastructure in order to unlock margin to invest in driving
branded growth, it has a number of opportunities to invest in the business at
attractive returns to both increase efficiency and automation and facilitate
growth through product innovation. With pension deficit payments now
suspended, the Group is allocating more funds to capital investment which will
provide the fuel to deliver further branded growth. During the year, it
installed an innovative energy efficient process to manufacture icing on
certain cake products, which increases line efficiency and also reduces carbon
emissions and also upgraded a Bisto packing line, delivering efficiency gains
and enhanced pack weight control. In FY25/26, the Group expects to increase
its capital investment further, to around £50m, which will include projects
such as expanding capacity to facilitate further growth from products
manufactured at its desserts site and an additional and larger solar panel
installation at another cake site.
Cash used in financing activities was £27.5m in the year (FY23/24: £20.7m)
which included a £14.9m dividend payment to shareholders (FY23/24: £12.4m)
and £9.9m purchase of shares to satisfy share awards (FY23/24: £6.3m). As at
29 March 2025, the Group held cash and bank deposits of £191.5m and its
£227.5m revolving credit facility was undrawn.
Pensions
The Pension scheme has continued to make strong progress, benefiting from
a successful investment strategy for both the RHM and Premier Foods sections
since the segregated merger of the scheme in June 2020. As previously
announced, deficit contribution payments to the pension scheme Trustee were
suspended with effect from 1 April 2024.
Furthermore, the RHM and Premier Foods sections of the pension scheme were
legally merged with effect from 29 March 2025. Post merger, the scheme
investment strategies are now being managed as one, and the disclosure of
assets and liabilities recorded as one total scheme, as outlined in the table
below. Additionally, the dividend match mechanism, whereby the pension scheme
received a proportion of cash whenever a cash dividend was paid to
shareholders, has been removed.
The results of the triennial valuation, at 31 March 2025, will be announced
when concluded. A full resolution of the pension scheme, where the scheme is
fully de-risked, is forecast to take place by the end of 2026.
Pensions accounting valuation (£m) 29 March 2025 30 March 2024 Change
Fair value of plan assets 3,212.8 3,565.0 (352.2)
Present value of defined benefit obligation (2,564.1) (2,963.5) 399.4
Surplus 648.7 601.5 47.2
The Group's pension scheme reported a surplus of £648.7m as at 29 March 2025,
an increase of £47.2m compared to the prior year. Asset values fell by
£352.2m or 9.9%, while the value of liabilities decreased by £399.4m, or
13.5%. The reduction in value of Government bonds was the main contributor of
the reduction in asset values in the year and as an associated point, the
applicable discount rate used to value liabilities was higher at 5.75%
(FY23/24: 4.80%) reflecting the hedging strategy employed by the scheme. The
RPI inflation rate assumption used was slightly lower at 3.05% (FY23/24:
3.15%).
Administration costs associated with running the pension schemes are expected
to be £6-8m in FY25/26.
Principal risks and uncertainties
Strong risk management is key to delivery of the Group's strategic objectives.
It has an established risk management process, with the Executive Leadership
Team performing a formal robust assessment of the principal risks bi-annually
which is reviewed by the Board and Audit Committee. Risks are monitored at a
segment and functional level throughout the year considering both internal and
external factors. The Group's principal risks will be disclosed in the
annual report and accounts for the financial period ended 29 March 2025. The
major strategic and operational risks are summarised under the headings of
Macroeconomic and geopolitical instability, Impact of Government legislation
on our products, Market and retailer actions, Supply chain
interruption, Legal compliance, Climate risk, Technology and cyber, Product
portfolio, People, M&A activity and Food safety.
Alex Whitehouse Duncan Leggett
Chief Executive Officer Chief Financial Officer
Appendices
The Company's Preliminary results are presented for the 52 weeks ended 29
March 2025 and the comparative period, 52 weeks ended 30 March 2024. All
references to the 'year', unless otherwise stated, are for the 52 weeks ended
29 March 2025 and the comparative period, 52 weeks ended 30 March 2024.
All references to the 'quarter', unless otherwise stated, are for the 13 weeks
ended 29 March 2025 and the comparative period, 13 weeks ended 30 March 2024.
Full year and Quarter 4 Revenue
Full year revenue FY24/25
(£m)
Statutory revenue Charnwood Headline revenue(1) Headline revenue(1) Headline revenue Headline revenue
(constant currency) % change vs prior year % change at constant currency
Grocery
Branded 773.3 - 773.3 774.3 4.5% 4.6%
Non-branded 76.9 (2.2) 74.7 74.7 (8.0%) (8.0%)
Total 850.2 (2.2) 848.0 849.0 3.2% 3.3%
Sweet Treats
Branded 233.8 - 233.8 233.8 7.3% 7.3%
Non-branded 65.0 - 65.0 65.0 (6.3%) (6.3%)
Total 298.8 - 298.8 298.8 4.0% 4.0%
Group
Branded 1,007.1 - 1,007.1 1,008.1 5.1% 5.2%
Non-branded 141.9 (2.2) 139.7 139.7 (7.2%) (7.2%)
Total 1,149.0 (2.2) 1,146.8 1,147.8 3.4% 3.5%
Quarter 4 revenue FY24/25
(£m)
Statutory revenue Charnwood Headline revenue(1) Headline revenue(1) Headline revenue Headline revenue
(constant currency) % change vs prior year % change at constant currency
Grocery
Branded 201.9 - 201.9 202.2 1.8% 1.9%
Non-branded 17.4 - 17.4 17.3 (7.4%) (7.4%)
Total 219.3 - 219.3 219.5 1.0% 1.1%
Sweet Treats
Branded 61.6 - 61.6 61.6 7.8% 7.8%
Non-branded 7.1 - 7.1 7.1 (12.5%) (12.5%)
Total 68.7 - 68.7 68.7 5.3% 5.3%
Group
Branded 263.5 - 263.5 263.8 3.1% 3.2%
Non-branded 24.5 - 24.5 24.4 (9.0%) (9.0%)
Total 288.0 - 288.0 288.2 2.0% 2.1%
Headline adjusted EBITDA to Operating profit reconciliation (£m) FY24/25 FY23/24
Headline adjusted EBITDA(4) 213.2 201.6
Depreciation (19.6) (19.5)
Software amortisation(11) (5.8) (4.9)
Headline Trading profit 187.8 177.2
Charnwood 0.0 2.3
Amortisation of brand assets (20.5) (20.9)
Fair value movements on foreign exchange & derivative contracts 0.3 (1.1)
Net finance income on pensions and administrative expenses 19.8 31.6
Non-trading items:
Impairment of fixed assets - (4.2)
Restructuring costs (1.2) (5.3)
Other non-trading items (5.1) (1.9)
Operating profit 181.1 177.7
Finance income and costs (£m) FY24/25 FY23/24 Change
Finance costs payable on senior secured notes 11.6 11.5 (0.1)
Bank debt interest - net(22) 5.0 8.3 3.3
16.6 19.8 3.2
Amortisation of debt issuance costs 1.9 1.8 (0.1)
Net regular interest(6) 18.5 21.6 3.1
Other finance costs payable 3.0 5.2 2.2
Write off of financing costs 1.4 - (1.4)
Other finance income (3.1) (0.5) 2.6
Net finance cost 19.8 26.3 6.5
Adjusted earnings per share (£m) FY24/25 FY23/24 Change
Headline Trading profit 187.8 177.2 6.0%
Less: Net regular interest(6) (18.5) (21.6) 14.5%
Adjusted profit before taxation 169.3 155.6 8.8%
Less: Notional tax (25%) (42.3) (38.9) (8.8%)
Adjusted profit after taxation(7) 127.0 116.7 8.8%
Average shares in issue (millions) 874.4 862.4 1.4%
Adjusted earnings per share (pence)(8) 14.5p 13.5p 7.3%
Net debt (£m)
Net debt(12) at 30 March 2024 235.6
Movement in cash (89.2)
Movement in debt issuance costs (0.5)
Movement in lease creditor (2.3)
Net debt at 29 March 2025 143.6
Adjusted EBITDA 213.2
Net debt / Adjusted EBITDA 0.7x
Free cash flow (£m) FY24/25 FY23/24
Headline Trading profit 187.8 177.2
Charnwood 0.0 2.3
Depreciation & software amortisation 25.4 24.4
Other non-cash items 4.6 6.6
Capital investment (41.4) (32.8)
Working capital(21) (10.0) (9.0)
Operating cash flow(16) 166.4 168.7
Interest paid (16.8) (20.3)
Pension contributions (9.2) (38.7)
Free cash flow(13) 140.3 109.7
Non-trading items (7.7) (14.4)
Purchase of shares to satisfy share awards net of proceeds from share issue (9.9) (6.0)
Re-financing fees (3.8) (0.5)
Taxation paid (9.9) (4.4)
Dividend paid (14.9) (12.4)
Additional employer contributions (pensions match) (5.0) (3.8)
Acquisition of subsidiaries, net of cash acquired 0.0 (29.3)
Movement in cash 89.2 38.9
Proceeds from borrowings - -
Net increase in cash and cash equivalents 89.2 38.9
As previously disclosed, the following table outlines the basis on which the
Group reported Headline revenue, Trading profit and adjusted earnings per
share for FY23/24. This includes acquisitions but excludes Revenue and Trading
profit from the Charnwood site which closed in FY24/25. In FY23/24, all
Charnwood revenue was reported in Grocery - Non-branded.
Group results ex Charnwood & Knighton(£m) FY23/24
Revenue Quarter 1 Quarter 2 Quarter 3 Quarter 4 Full Year
Statutory revenue 235.9 258.2 356.3 287.1 1,137.5
Less: Knighton (4.8) (4.9) (3.6) (1.6) (14.9)
Headline revenue (FY23/24 basis) 231.1 253.3 352.7 285.5 1,122.6
Less: Charnwood (3.9) (3.8) (3.1) (3.1) (13.9)
Headline revenue (FY24/25 basis) 227.2 249.5 349.6 282.4 1,108.7
Trading profit (£m) to adjusted eps (p) Half 1 Half 2 Full Year
Trading profit as reported 67.5 112.0 179.5
Less: Charnwood (0.9) (1.4) (2.3)
Headline Trading profit (FY24/25 basis) 66.6 110.6 177.2
Net regular interest (10.6) (11.0) (21.6)
Adjusted profit before taxation 56.0 99.6 155.6
Adjusted profit after taxation at 25% 42.0 74.7 116.7
Adjusted earnings per share (pence) 4.9p 8.6p 13.5p
Notes and definitions of alternative performance measures
The Company uses a number of alternative performance measures to measure and
assess the financial performance of the business. The directors believe that
these alternative performance measures assist in providing additional useful
information on the underlying trends, performance and position of the Group.
These alternative performance measures are used by the Group for reporting and
planning purposes and it considers them to be helpful indicators for investors
to assist them in assessing the strategic progress of the Group.
1. Headline revenue, including Grocery, UK or International branded revenue is
stated on a constant currency basis, while the non-branded revenue is not
impacted by the foreign currency movements. The constant currency calculation
is made by adjusting the current year's sales to the same exchange rate as the
prior year to give a like for like comparison. Headline revenue and
non-branded revenue excludes Charnwood & Knighton and is reconciled in
appendices.
2. The Group uses Trading profit to review overall Group profitability. Trading
profit is defined as profit/(loss) before taxation, before net finance costs,
amortisation of brand assets, non-trading items (see note 10), fair value
movements on foreign exchange and other derivative contracts, net interest on
pensions and administration expenses. Headline Trading profit excludes Trading
profit generated by Charnwood in the prior year, Charnwood contributing nil
Trading profit in the current year and Knighton contributing nil Trading
profit in both current and prior year. Headline Trading profit margin is
calculated by dividing Headline Trading profit at actual rate by Headline
Revenue at actual rate.
3. Divisional contribution refers to Gross profit less selling, marketing and
distribution costs directly attributable to the relevant business segment.
Headline Divisional contribution excludes Divisional contribution generated by
Charnwood in the prior year, Charnwood contributing nil Divisional
contribution in the current year and Knighton contributing nil Divisional
contribution in both current and prior year. Headline Divisional contribution
margin is calculated by dividing Headline Divisional contribution at actual
rate by Headline Revenue at actual rate.
4. Headline Adjusted EBITDA is Headline Trading profit as defined in (2) above
excluding depreciation and software amortisation. Adjusted EBITDA, mentioned
elsewhere, is Trading profit as defined in (2) above excluding depreciation
and software amortisation. There is no difference between Adjusted EBITDA and
Headline Adjusted EBITDA.
5. Adjusted profit before taxation is Headline Trading profit as defined in (2)
above less net regular interest as defined in (6) below.
6. Net regular interest is defined as net finance cost after excluding write-off
of financing costs, other finance costs payable and other finance income.
7. Adjusted profit after taxation is Adjusted profit before taxation as defined
in (5) above less a notional tax charge of 25.0%.
8. References to Adjusted earnings per share are on a non-diluted basis and is
calculated using Adjusted profit after taxation as defined in (7) above
divided by the weighted average of the number of shares of 874.4 million for
the 52 weeks ended 29 March 2025 (52 weeks ended 30 March 2024: 862.4
million).
9. International sales remove the impact of foreign currency fluctuations and
adjusts prior year sales to ensure comparability in geographic market
destinations. The constant currency calculation is made by adjusting the
current year's sales to the same exchange rate as the prior year to give a
like for like comparison. The constant currency adjustment is calculated by
applying a blended rate. International sales exclude sales to Republic of
Ireland.
£m Reported Adjustment Constant currency
FY24/25 51.3 0.2 51.5
FY23/24 41.9 N/A 41.9
Growth % 22.3% N/A 22.9%
1. Non-trading items have been presented separately throughout the financial
statements for the 52 weeks ended 29 March 2025. These are items that
management believes require separate disclosure by virtue of their nature in
order that the users of the financial statements obtain a clear and consistent
view of the Group's underlying trading performance. In identifying non-trading
items, management have applied judgement including whether i) the item is
related to underlying trading of the Group; and/or ii) how often the item is
expected to occur.
2. Software amortisation is the annual charge related to the amortisation of the
Group's software assets during the period.
3. Net debt is defined as total borrowings, less cash and cash equivalents and
less capitalised debt issuance costs.
4. Free cash flow is Net increase in cash and cash equivalents excluding proceeds
from borrowings, less dividend paid, additional employer contributions,
re-financing fees, Purchase of shares to satisfy share awards net of proceeds
from share issue, taxation paid, acquisitions of subsidiaries net of cash
acquired and non-trading items.
5. Circana, 52 weeks ended 29 March 2025.
6. Circana, 24 weeks ended 29 March 2025.
7. Operating cash flow is Free cash flow as defined in (13) excluding interest
paid and pension contributions.
8. Further details of progress on the Group's Enriching Life Plan will be
provided in the forthcoming publication of the 2025 Annual Report.
9. Defined as scoring less than 4 on UK Government's Nutrient Profiling Model
10. The Revolving Credit Facility attracts a margin on a ratchet grid according to
latest reported Net debt/EBITDA
11. Circana, 26 weeks ended 29 March 2025.
12. Working capital is the cash movement from the opening to closing balance sheet
position for inventory, trade and other receivables, trade and other payables
and provisions; it also includes outflows related to the principle element of
leases and is adjusted to exclude non-cash movements in non-trading items.
13. Bank debt interest - net represents finance costs payable on bank loans and
overdrafts minus finance income receivable on bank deposits.
14. Throughout this report references to the 'year' refer to the Group's 52 week
financial period.
Additional notes:
· The directors believe that users of the financial statements are most
interested in underlying trading performance and cash generation of the Group.
As such intangible brand asset amortisation is excluded from Trading profit
because it is a non-cash item.
· Group & corporate costs refer to group and corporate expenses which are
not directly attributable to a reported segment and are disclosed at total
Group level.
· In line with Accounting Principles, the International operating segment, the
results of which are aggregated within the Grocery reported segment, are not
required to be separately disclosed for reporting purposes.
Consolidated statement of profit or loss
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
Note £m £m
Revenue 3 1,149.0 1,137.5
Cost of sales (709.7) (705.2)
Gross profit 439.3 432.3
Selling, marketing and distribution costs (174.5) (178.8)
Administrative costs (83.7) (75.8)
Operating profit 3 181.1 177.7
Finance cost 4 (28.9) (30.4)
Finance income 4 9.1 4.1
Profit before taxation 161.3 151.4
Taxation 5 (36.4) (38.9)
Profit for the period attributable to owners of the parent 124.9 112.5
Earnings per share (pence)
Basic 6 14.3 13.0
Diluted 6 14.1 12.7
Consolidated statement of comprehensive income
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
Note £m £m
Profit for the period 124.9 112.5
Other comprehensive income / (expense), net of tax
Items that will never be reclassified to profit or loss
Remeasurements of defined benefit schemes 7 13.6 (237.7)
Deferred tax (charge) / credit on pensions movements 5 (4.0) 50.6
Current tax credit on pension movements 5 0.4 8.4
Items that are or may be reclassified subsequently to profit or loss
Exchange differences on translation (0.4) (0.5)
Other comprehensive income / (expense), net of tax 9.6 (179.2)
Total comprehensive income / (expense) attributable to owners of the parent 134.5 (66.7)
Consolidated balance sheet
As at As at
29 March 2025 30 March 2024
Note £m £m
ASSETS:
Non-current assets
Property, plant and equipment 204.3 190.4
Goodwill 702.7 702.7
Other intangible assets 271.2 289.6
Deferred tax assets 5 16.7 22.4
Net retirement benefit assets 7 648.7 810.0
1,843.6 2,015.1
Current assets
Inventories 101.5 98.9
Trade and other receivables 115.0 115.7
Cash and cash equivalents 9 191.5 102.3
Derivative financial instruments 0.1 -
408.1 316.9
Total assets 2,251.7 2,332.0
LIABILITIES:
Current liabilities
Trade and other payables (260.1) (264.6)
Financial liabilities
- derivative financial instruments 9 (0.6) (0.8)
Lease liabilities (1.9) (2.7)
Provisions for liabilities and charges (6.7) (9.8)
Current income tax liabilities 5 - (0.4)
Other liabilities (1.0) -
(270.3) (278.3)
Non-current liabilities
Long-term borrowings 10 (325.2) (325.7)
Lease liabilities (8.0) (9.5)
Net retirement benefit obligations - (208.5)
Provisions for liabilities and charges (7.3) (7.3)
Deferred tax liabilities 5 (178.3) (152.9)
Other liabilities (20.6) (22.9)
(539.4) (726.8)
Total liabilities (809.7) (1,005.1)
Net assets 1,442.0 1,326.9
EQUITY:
Capital and reserves
Share capital 86.9 86.9
Share premium 2.7 2.7
Merger reserve 351.7 351.7
Other reserves (9.3) (9.3)
Retained earnings 1,010.0 894.9
Total equity 1,442.0 1,326.9
Consolidated statement of cash flows
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
Note £m £m
Cash generated from operations 8 188.6 146.4
Finance costs paid¹ (26.6) (23.9)
Finance income received 6.0 3.6
Taxation paid (9.9) (4.4)
Cash generated from operating activities 158.1 121.7
Acquisition of subsidiaries, net of cash acquired - (29.3)
Purchases of property, plant and equipment (33.5) (24.7)
Purchases of intangible assets (7.9) (8.1)
Cash used in investing activities (41.4) (62.1)
Principal element of lease payments (2.7) (1.8)
Financing fees - (0.5)
Dividends paid 11 (14.9) (12.4)
Purchase of shares to satisfy share awards (9.9) (6.3)
Proceeds from share issue - 0.3
Cash used in financing activities (27.5) (20.7)
Net increase in cash and cash equivalents 89.2 38.9
Cash and cash equivalents at beginning of period 102.3 63.4
Cash and cash equivalents at end of period 8 191.5 102.3
¹ Payments in the current period include £3.8m of costs related to the
refinancing of the revolving credit facility. See note 10 for further details.
Consolidated statement of changes in equity
Note Share capital Share premium Merger reserve Other reserves Retained earnings(1) Total equity
£m £m £m £m £m £m
At 2 April 2023 86.8 2.5 351.7 (9.3) 974.3 1,406.0
Profit for the period - - - - 112.5 112.5
Remeasurements of defined benefit schemes 7 - - - - (237.7) (237.7)
Deferred tax credit 5 - - - - 50.6 50.6
Current tax credit 5 - - - - 8.4 8.4
Exchange differences on translation - - - - (0.5) (0.5)
Other comprehensive expense - - - - (179.2) (179.2)
Total comprehensive expense - - - - (66.7) (66.7)
Shares issued 0.1 0.2 - - - 0.3
Share-based payments - - - - 4.4 4.4
Purchase of shares to satisfy share awards - - - - (6.3) (6.3)
Deferred tax movements on share-based payments 5 - - - - 1.6 1.6
Dividends 11 - - - - (12.4) (12.4)
At 30 March 2024 86.9 2.7 351.7 (9.3) 894.9 1,326.9
At 31 March 2024 86.9 2.7 351.7 (9.3) 894.9 1,326.9
Profit for the period - - - - 124.9 124.9
Remeasurements of defined benefit schemes 7 - - - - 13.6 13.6
Deferred tax charge 5 - - - - (4.0) (4.0)
Current tax credit 5 - - - - 0.4 0.4
Exchange differences on translation - - - - (0.4) (0.4)
Other comprehensive income - - - - 9.6 9.6
Total comprehensive income - - - - 134.5 134.5
Share-based payments - - - - 4.6 4.6
Purchase of shares to satisfy share awards - - - - (9.9) (9.9)
Deferred tax movements on share-based payments 5 - - - - 0.8 0.8
Dividends 11 - - - - (14.9) (14.9)
At 29 March 2025 86.9 2.7 351.7 (9.3) 1,010.0 1,442.0
(1)Included in Retained earnings at 29 March 2025 is £4.3m in relation to
cumulative translation losses (2024: £3.9m loss, 2023: £3.4m loss).
1. General Information
The financial information included in this preliminary announcement does not
constitute the Company's statutory accounts for the 52 weeks ended 29 March
2025 and for the 52 weeks ended 30 March 2024, but is derived from those
accounts. Statutory accounts for the 52 weeks ended 30 March 2024 have been
delivered to the registrar of companies, and those for 52 weeks ended 29 March
2025 will be delivered in due course. The auditor has reported on those
accounts; their reports were (i) unqualified, (ii) did not include a reference
to any matters to which the auditor drew attention to by way of emphasis
without qualifying their report, and (iii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
The consolidated financial statements of the Company have been prepared in
accordance with UK-adopted international accounting standards.
Basis for preparation of financial statements on a going concern basis
The Group's revolving credit facility includes net debt/EBITDA and
EBITDA/interest covenants as detailed in note 10. In the event these covenants
are not met then the Group would be in breach of its financing agreement and,
as would be the case in any covenant breach, the banking syndicate could
withdraw funding to the Group. The Group was compliant with its covenant tests
as at 28 September 2024 and 29 March 2025.
Having undertaken a robust assessment of the Group's forecasts with specific
consideration to the trading performance of the Group, cashflows and covenant
compliance, the directors have a reasonable expectation that the Group is able
to operate within the level of its current facilities, meet the required
covenant tests and has adequate resources to continue in operational existence
for at least 12 months from the date of approval of these financial
statements. The Group therefore continues to adopt the going concern basis in
preparing its financial information for the reasons set out below:
At 29 March 2025 the Group had total assets less current liabilities of
£1,981.4m (2024: £2,053.7m), net current assets of £137.8m (2024: £38.6m)
and net assets of £1,442.0m (2024: £1,326.9m).Liquidity as at that date was
£436.0m, made up of cash and cash equivalents, and undrawn committed credit
facilities of £227.5m expiring in July 2029. At the time of the approval of
this report, the cash and liquidity position of the Group has not changed
significantly. Further details of the financing arrangements are included in
note 10.
The directors have rigorously reviewed all key risk assumptions in their Going
Concern assessment considering both internal and external factors. Applying
judgement, the global political environment, increasing costs including
inflation, climate change, risk of cyber-attack and the retail market are the
assumptions modelled by the directors in the severe but plausible downside
case impacting future financial performance, cash flows and covenant
compliance, that cover a period of at least 12 months from the date of
approval of the financial statements.
Whilst the downside case is deemed severe but plausible, it is considered by
the directors to be a robust stress test of going concern, having an adverse
impact on revenue, margin and cash flow. Should circumstances mean there is
further downside, whilst not deemed plausible, the directors, in response have
identified mitigating actions within their control, that would reduce costs,
optimise cashflow and liquidity. Amongst these are the following actions:
reducing capital expenditure, reducing marketing spend and delaying or
cancelling discretionary spend. The directors have assumed no significant
structural changes to the business will be needed in any of the assumptions
modelled. None of the assumptions modelled are sufficiently material to
prevent the Group from continuing as a going concern.
The directors, after reviewing financial forecasts and financing arrangements,
have a reasonable expectation that the Group has adequate resources to
continue to meet its liabilities as they fall due for at least 12 months from
the date of approval of this report. Accordingly, the directors are satisfied
that it is appropriate to continue to adopt the going concern basis (in
accordance with the guidance 'Guidance on the Going Concern Basis of
Accounting and Related Reporting' issued by the FRC) in preparing its
consolidated financial information.
Climate change
The Group has considered the impact of both physical and transitional climate
change risks on the financial statements of the Group, the Group does not
consider there to be a material impact on the valuation of the Group's assets
or liabilities, including useful economic life of property, plant and
equipment, or on any material accounting estimates or judgements. The Group
will continue to monitor the impact on valuations of assets and liabilities as
government policy evolves and our modelling in this area moves forward.
The impact of climate change has been considered in the projected cash flows
used for impairment testing
2. Material Estimates and judgements
The following are areas of particular significance to the Group's financial
statements and may include the use of estimates. Results may differ from
actual amounts.
Material accounting estimates
The following are considered to be the key estimates within the financial
statements:
2.1 Employee benefits
The present value of the Group's defined benefit pension obligations depends
on a number of actuarial assumptions. The primary assumptions used include the
discount rate applicable to scheme liabilities, the long-term rate of
inflation and estimates of the mortality applicable to scheme members. Each of
the underlying assumptions is set out in more detail in note 7.
At each reporting date, and on a continuous basis, the Group reviews the
macro-economic, Company and scheme-specific factors influencing each of these
assumptions, using professional advice, in order to record the Group's ongoing
commitment and obligation to defined benefit schemes in accordance with IAS 19
(Revised).
Plan assets of the defined benefit schemes include a number of assets for
which quoted prices are not available. At each reporting date, the Group
determines the fair value of these assets with reference to most recently
available asset statements from fund managers.
Where pensions asset valuations were not available at the reporting date, as
is usual practice, valuations at 31 December 2024 are rolled forward for cash
movements to the end of March 2025 to estimate the valuations for these
assets. This approach is principally relevant for Private equity, Property
assets, Illiquid credits and Global credits. Management have reviewed the
individual investments, disclosed the value asset where a lagged valuation is
reported with a sensitivity and making clear that these valuations are subject
to estimation uncertainty.
2.2 Goodwill
Impairment reviews in respect of goodwill are performed at least annually and
more regularly if there is an indicator of impairment. Impairment reviews in
respect of intangible assets are performed when an event indicates that an
impairment review is necessary. Examples of such triggering events include a
significant planned restructuring, a major change in market conditions or
technology, expectations of future operating losses, or a material reduction
in cash flows. In performing its impairment analysis, the Group takes into
consideration these indicators including the difference between its market
capitalisation and net assets.
The Group has considered the impact of the assumptions used on the
calculations and has conducted sensitivity analysis on the value in use
calculations of the CGUs carrying values for the purposes of testing goodwill.
2.3 Commercial arrangements
Sales rebates and discounts are accrued on each relevant promotion or customer
agreement and are charged to the statement of profit or loss at the time of
the relevant promotional buy-in as a deduction from revenue. Accruals for each
individual promotion or rebate arrangement are based on the type and length of
promotion and nature of customer agreement. At the time an accrual is made,
the nature, funding level and timing of the promotion is typically known.
Areas of estimation are sales volume/activity, phasing and the amount of
product sold on promotion.
For short-term promotions, the Group performs a true up of estimates where
necessary on a monthly basis, using real-time customer sales information where
possible and finally on receipt of a customer claim, which typically follows
one to two months after the end of a promotion. For longer-term discounts and
rebates the Group uses actual and forecast sales to estimate the level of
rebate. These accruals are updated monthly based on latest actual and forecast
sales. If the Commercial accruals balance moved by 5.0% in either direction,
this would have an impact of £3.6m. (2024: £3.7m)
2.4 Estimated values of acquired intangible assets on acquisitions
Acquired brands that are controlled through custody or legal rights and that
could be sold separately from the rest of the business are capitalised, where
fair value can be reliably measured. On acquisition, an intangible asset
relating to the brand is recognised as a fair value adjustment to the opening
balance sheet. The brand asset is valued using a relief from royalty approach.
The key assumptions underpinning the brand asset valuation are the revenue
projections, discount rates and royalty rates. Applying different assumptions
could result in a materially different brand intangible asset and a
corresponding increase or decrease in the value of the residual goodwill
recognised.
Judgements
The following are considered to be the key judgements within the financial
statements:
2.5 Non-trading items
Non-trading items have been presented separately throughout the financial
statements. These are items that management believes require separate
disclosure by virtue of their nature in order that the users of the financial
statements obtain a clear and consistent view of the Group's underlying
trading performance. In identifying non-trading items, management have applied
judgement including whether i) the item is related to underlying trading of
the Group; and/or ii) how often the item is expected to occur.
3. Segmental analysis
IFRS 8 requires operating segments to be determined based on the Group's
internal reporting to the Chief Operating Decision Maker ('CODM'). The CODM
has been determined to be the Executive Leadership Team as it is primarily
responsible for the allocation of resources to segments and the assessment of
performance of the segments.
The Group's operating segments are defined as 'Grocery', 'Sweet Treats', and
'International'. The CODM reviews the performance by operating segment. The
Grocery segment primarily sells savoury ambient food products, and the Sweet
Treats segment sells primarily sweet ambient food products. Sales to Ireland
were previously included in the International operating segment; following an
internal reorganisation these sales are included as part of the Grocery
operating segment from 1 April 2024. The International segment has been
aggregated within the Grocery segment for reporting purposes as revenue is
below 10.0% of the Group's total revenue and the segment is considered to have
similar characteristics to that of Grocery as identified in IFRS 8. There has
been no change to the reported segments during the year.
The CODM uses Divisional contribution as the key measure of the segments'
results. Divisional contribution is defined as gross profit after selling,
marketing and distribution costs. Divisional contribution is a consistent
measure within the Group and reflects the segments' underlying trading
performance for the period under evaluation. Gross profit is used as part of
the Group segment performance reviews, whilst this is material in the context
of the financial statements, the gross profit split between segments is
broadly proportionate to that of divisional contribution. As a result, Gross
profit presented by segment would not influence the decisions of the financial
statement users.
The Group uses trading profit to review overall Group profitability. Trading
profit is defined as pre-tax profit/loss before net finance costs,
amortisation of intangible assets, fair value movements on foreign exchange
and other derivative contracts, net pensions finance income and administrative
expenses, and any material items that require separate disclosure by virtue of
their nature in order that users of the financial statements obtain a clear
and consistent view of the Group's underlying trading performance.
Revenues in the period ended 29 March 2025, from the Group's four principal
customers, which individually represent over 10.0% of total Group revenue, are
£308.3m, £155.7m, £133.3m and £113.5m (2024: £289.9m, £156.5m, £127.9m
and £109.6m). These revenues relate to both the Grocery and Sweet Treats
reportable segments.
The segment results for the period ended 29 March 2025, for the period ended
30 March 2024 and the reconciliation of the segment measures to the respective
statutory items included in the consolidated financial statements are as
follows:
52 weeks ended 29 March 2025 52 weeks ended 30 March 2024
Grocery Sweet Total Grocery Sweet Total
Treats
Treats
£m £m £m £m £m £m
External revenues 850.2 298.8 1,149.0 850.4 287.1 1,137.5
Divisional contribution 229.4 35.4 264.8 219.8 33.7 253.5
Group and corporate costs (77.0) (74.0)
Trading profit 187.8 179.5
Amortisation of brand assets (20.5) (20.9)
Fair value movements on foreign exchange and other derivative contracts(1) 0.3 (1.1)
Net finance income on pensions and administrative expenses 19.8 31.6
Non-trading items:
- Impairment of fixed assets(2) - (4.2)
- Restructuring costs³ (1.1) (5.3)
- Other non-trading items(4) (5.2) (1.9)
Operating profit 181.1 177.7
Finance cost (28.9) (30.4)
Finance income 9.1 4.1
Profit before taxation 161.3 151.4
(1)The gain of £0.3m (2024: loss of £1.1m) reflects changes in fair value
rate during the current period and movement in nominal value of the
instruments held at 29 March 2025 from the 30 March 2024 position.
(2) Impairment of fixed assets in the prior period related to the closure of
the Knighton and Charnwood sites.
(3) Restructuring costs in the current period relate primarily to
organisational changes to support a new planning system implementation.
Restructuring costs in the prior period includes £3.7m, which relates to the
closure of the Knighton site with the remainder relating to the closure of the
Charnwood site.
(4)Other non-trading items in the current and prior period primarily relates
to the closure of the Knighton and Charnwood sites.
( )
( )
Inter-segment transfers or transactions are entered into under the same terms
and conditions that would be available to unrelated third parties.
The Group primarily supplies the UK market, although it also supplies certain
products to other countries in Europe and the rest of the world. The following
table provides an analysis of the Group's revenue, which is allocated on the
basis of geographical market destination, and an analysis of the Group's
non-current assets by geographical location.
Revenue
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
United Kingdom 1,071.8 1,067.1
Other Europe 32.9 34.9
Rest of world 44.3 35.5
Total 1,149.0 1,137.5
( ) ( ) ( )
Non-current assets
As at As at
29 March 2025 30 March 2024
£m £m
United Kingdom 1,178.2 1,182.7
Non-current assets exclude deferred tax assets and net retirement benefit
assets.
4. Finance income and costs
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Finance costs payable on bank loans and overdrafts (11.0) (11.9)
Finance costs payable on senior secured notes (11.6) (11.5)
Other finance costs payable(1) (3.0) (5.2)
Amortisation of debt issuance costs (1.9) (1.8)
Write off of financing costs(2) (1.4) -
Total finance cost (28.9) (30.4)
Finance income receivable on bank deposits 6.0 3.6
Other finance income(3) 3.1 0.5
Total finance income 9.1 4.1
Net finance cost (19.8) (26.3)
(1)Included in other finance costs payable is £0.7m charge (2024: £0.8m
charge) relating to non-cash finance costs on lease liabilities under IFRS 16
and £2.3m (2024: £4.4m) relating to the unwind of the Group's long-term
provisions.
(2) Relates to the refinancing of the revolving credit facility in the current
period.
(3) Other finance income includes both the unwind of the discount of the
Group's long-term provisions and remeasurement of contingent consideration
related to Group acquisitions.
5. Taxation
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Current tax
- Current period (10.0) (14.6)
- Prior periods 1.5 0.6
Deferred tax
- Current period (29.5) (24.9)
- Prior periods 1.6 -
Income tax charge (36.4) (38.9)
Tax relating to items recorded in other comprehensive income / (expense)
included:
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Current tax credit on pension movements 0.4 8.4
Deferred tax (charge) / credit on pension movements (4.0) 50.6
(3.6) 59.0
The applicable rate of corporation tax for the period is 25.0%. The UK
deferred taxes at 29 March 2025 and 30 March 2024 have been measured using
this enacted rate.
The tax charge for the period differs from the standard rate of corporation
tax in the United Kingdom of 25.0% (2024: 25.0%). The reasons for this are
explained below:
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Profit before taxation 161.3 151.4
Tax charge at the domestic income tax rate of 25.0% (2024: 25.0%) (40.3) (37.9)
Tax effect of:
Non-taxable items (1.4) (2.6)
Losses not previously recognised 2.2 -
Acquisitions - 1.0
Adjustments to prior periods 3.1 0.6
Income tax charge (36.4) (38.9)
Losses of £2.2m has been recognised (movement between unrecognised and
recognised) for the 52 weeks ended 29 March 2025. In the prior year £nil
was recognised. Corporation tax losses are not recognised where future
recoverability is uncertain.
The adjustments to prior periods of £3.1m (2024: £0.6m) relates primarily to
the changes in prior period capital allowances, utilisation of losses and RDEC
(Research and Development expenditure credit) following verifications in
submitted returns.
The Group is in scope of the Pillar Two legislation and has performed an
assessment of the Group's potential exposure to Pillar Two income taxes. The
assessment of the potential exposure to Pillar Two income taxes is based on
the most recent country-by-country reporting prepared for the Group and based
on this assessment, the Group will not have any material potential exposure
to Pillar Two top-up taxes.
Deferred tax
Deferred tax is calculated in full on temporary differences using the tax rate
appropriate to the jurisdiction in which the asset/(liability) arises and the
tax rates that are expected to apply in the periods in which the asset or
liability is settled.
2025 2024
£m £m
At 31 March 2024 / 2 April 2023 (130.5) (155.5)
Business combinations - (2.3)
Charged to the statement of profit or loss (27.9) (24.9)
(Charged)/credited to other comprehensive income (4.0) 50.6
Credited to equity 0.8 1.6
At 29 March 2025 / 30 March 2024 (161.6) (130.5)
The Group has not recognised £0.3m of deferred tax assets (2024: £2.5m not
recognised) relating to international corporation tax losses as future
recoverability is considered uncertain. In addition, the Group has not
recognised a tax asset of £67.8m (2024: £67.8m) relating to Advanced
Corporation Tax ('ACT') and £75.8m (2024: £75.8m) relating to capital
losses. Under current legislation these can generally be carried forward
indefinitely.
Deferred tax liabilities Intangibles Retirement benefit obligation Leases Other Total
£m £m £m £m £m
At 2 April 2023 (68.3) (187.9) (0.8) (1.3) (258.3)
Acquisition of FUEL10K Limited (3.6) - - - (3.6)
Current period credit/(charge) 1.7 (10.0) 0.4 1.0 (6.9)
Credited to other comprehensive income - 50.6 - - 50.6
At 30 March 2024 (70.2) (147.3) (0.4) (0.3) (218.2)
At 31 March 2024 (70.2) (147.3) (0.4) (0.3) (218.2)
Current period credit/(charge) 1.6 (8.0) - - (6.4)
Charged to other comprehensive income - (4.0) - - (4.0)
At 29 March 2025 (68.6) (159.3) (0.4) (0.3) (228.6)
Deferred tax assets Accelerated tax depreciation Share-based payments Losses Other Total
£m £m £m £m £m
At 2 April 2023 40.2 3.9 55.8 2.9 102.8
Acquisition of FUEL10K Limited - - 1.3 - 1.3
Current period (charge)/credit (11.3) 1.0 (7.4) (0.3) (18.0)
Credited to equity - 1.6 - - 1.6
Prior period credit/(charge)
- To statement of profit or loss 0.1 - 0.7 (0.8) -
At 30 March 2024 29.0 6.5 50.4 1.8 87.7
At 31 March 2024 29.0 6.5 50.4 1.8 87.7
Current period (charge)/credit (14.7) 0.3 (8.4) (0.3) (23.1)
Credited to equity - - - - -
Prior period (charge)/credit -
- To statement of profit or loss (0.6) - 2.2 - 1.6
- To equity - 0.8 - - 0.8
At 29 March 2025 13.7 7.6 44.2 1.5 67.0
Deferred tax asset on losses and accelerated tax depreciation £m
As at 29 March 2025 16.7
As at 30 March 2024 22.4
Net deferred tax liability £m
As at 29 March 2025 (178.3)
As at 30 March 2024 (152.9)
Where there is a legal right of offset and an intention to settle as such,
deferred tax assets and liabilities may be presented on a net basis. This is
the case for most of the Group's deferred tax balances except non-trading
losses of £16.7m (2024: £22.4m). The remainder of deferred tax assets have,
therefore, been offset in the tables above. Substantial elements of the
Group's deferred tax assets and liabilities, primarily relating to the defined
benefit pension obligation, are greater than one year in nature.
6. Earnings per share
Basic earnings per share has been calculated by dividing the profit
attributable to owners of the parent of £124.9m (2024: £112.5m profit) by
the weighted average number of ordinary shares of the Company.
Weighted average shares
2025 2024
Number (m) Number (m)
Weighted average number of ordinary shares for the purpose of basic earnings 874.4 862.4
per share
Effect of dilutive potential ordinary shares:
- Share options 10.8 21.1
Weighted average number of ordinary shares for the purpose of diluted earnings 885.2 883.5
per share
Contingently issuable shares are included in the calculation for the weighted
average number of ordinary shares used for basic earnings per share.
Earnings per share calculation
52 weeks ended 29 March 2025 52 weeks ended 30 March 2024
Basic Dilutive effect of share options Diluted Basic Dilutive effect of share options Diluted
Profit after tax (£m) 124.9 124.9 112.5 112.5
Weighted average number of shares (m) 874.4 10.8 885.2 862.4 21.1 883.5
Earnings per share (pence) 14.3 (0.2) 14.1 13.0 (0.3) 12.7
Dilutive effect of share options
The dilutive effect of share options is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares. The only dilutive potential ordinary
shares of the Company are share options and share awards. A calculation is
performed to determine the number of shares that could have been acquired at
fair value (determined as the average annual market share price of the
Company's shares) based on the monetary value of the share awards and the
subscription rights attached to the outstanding share options.
No adjustment is made to the profit or loss in calculating basic and diluted
earnings per share.
Adjusted earnings per share ('Adjusted EPS')
Adjusted earnings per share is defined as trading profit less net regular
interest, less a notional tax charge at 25.0% (2024: 25.0%) divided by the
weighted average number of ordinary shares of the Company.
Net regular interest is defined as net finance cost after excluding other
finance cost and other finance income.
Trading profit and Adjusted EPS have been reported as the directors believe
these assist in providing additional useful information on the underlying
trends, performance and position of the Group.
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Trading profit (note 3) 187.8 179.5
Less net regular interest (18.5) (21.6)
Adjusted profit before taxation 169.3 157.9
Notional tax at 25.0% (2024: 25.0%) (42.3) (39.5)
Adjusted profit after taxation 127.0 118.4
Average shares in issue (m) 874.4 862.4
Adjusted basic EPS (pence) 14.5 13.7
Dilutive effect of share options (0.2) (0.3)
Adjusted dilutive EPS (pence) 14.3 13.4
Net regular interest
Net finance cost (19.8) (26.3)
Exclude other finance cost 3.0 5.2
Exclude write-off of financing costs 1.4 -
Exclude other finance income (3.1) (0.5)
Net regular interest (18.5) (21.6)
7. Retirement benefit schemes
Defined benefit schemes
The Group operates a number of defined benefit schemes under which current and
former employees have built up an entitlement to pension benefits on their
retirement. These are as follows:
§ The RHM Pension Scheme
§ Premier Grocery Products Ireland Pension Scheme ('PGPIPS')
§ Premier Foods Ireland Pension Scheme
§ Chivers 1987 Pension Scheme
The Premier Foods Pension Scheme and the Premier Grocery Products Pension
Scheme were merged with the RHM Pension Scheme in 2020 on a "segregated" basis
as three sections in the RHM Pension Scheme - the RHM Section, the Premier
Foods Section and the Premier Grocery Products Section - each with its own
separate pool of assets and its own liabilities.
With effect from 29 March 2025, the RHM Pension Scheme was "desegregated" with
the liabilities of all three sections now paid from a single pool of assets
(the 'desegregation'). As a result the following disclosures are presented
on a combined basis.
The exchange rates used to translate the overseas euro-based schemes are
£1.00 = €1.1903 (2024: £1.00 = €1.1587 for the average rate during the
period, and £1.00 = €1.1956 (2024: £1.00 = €1.1699) for the closing
position at period-end.
All defined benefit schemes are held separately from the Company under Trusts.
Trustees are appointed to operate the schemes in accordance with their
respective governing documents and pensions law. The schemes meet the legal
requirement for member nominated trustees' representation on the trustee
boards. Trustee directors undertake regular training and development to ensure
that they are equipped appropriately to carry out the role. In addition, each
trustee board has appointed professional advisors to give them the specialist
expertise they need to support them in the areas of investment, funding,
legal, covenant and administration.
The trustee boards generally meet at least four times a year to conduct their
business. To support these meetings, certain aspects of the schemes' operation
are delegated to give specialist focus (e.g. investment, administration and
compliance) to committees for which further meetings are held as appropriate
throughout the year. These committees regularly report to the full trustee
boards.
The schemes invest through investment managers appointed by the trustees in a
broad range of assets to support the security and funding of their pension
obligations. Asset classes used include government bonds, private equity,
absolute return products, swaps, infrastructure, illiquid credits and global
credits.
The scheme assets do not include any of the Group's own financial instruments,
nor any property occupied by, or other assets used by, the Group. The RHM
Pension Scheme currently holds a security over the assets of the Group, which
ranks pari passu with the banks and bondholders in the event of insolvency, up
to a cap.
The schemes incorporate a Liability Driven Investment (LDI) strategy to more
closely match the assets with changes in value of liabilities. The RHM Pension
Scheme uses assets including interest rate and inflation swaps, index-linked
bonds and infrastructure in its LDI strategy.
In setting the investment strategy, the primary concern for the trustee of the
RHM Pension Scheme is to act in the best financial interests of all
beneficiaries, seeking the best return that is consistent with a prudent and
appropriate level of risk. This includes the risk that environmental, social
and governance factors, including climate change, negatively impact the value
of investments held if not understood and evaluated properly. The trustee
considers this risk by taking advice from its investment advisors when
choosing asset classes, selecting managers, and monitoring performance.
The main risks to which the Group is exposed in relation to the funded pension
schemes are as follows:
· Liquidity risk -The RHM Pension Scheme is currently in surplus, but subsequent
valuations could reveal a deficit. As such, this could have an adverse impact
on the financial position of the Group. The Group continues to monitor the
pension risks closely working with the trustees to ensure a collaborative
approach.
· Mortality risk - the assumptions adopted make allowance for future
improvements in life expectancy. However, if life expectancy improves at a
faster rate than assumed, this would result in greater payments from the
schemes and consequently, increases in the schemes liabilities. The trustees
review the mortality assumption on a regular basis to minimise the risk of
using an inappropriate assumption.
· Yield risk - a fall in government bond yields will increase the schemes
liabilities and certain of the assets. However, the liabilities may grow by
more in monetary terms, thus increasing the deficit in the scheme.
· Inflation risk - the majority of the schemes liabilities increase in line with
inflation and so if inflation is greater than expected, the liabilities will
increase.
· Investment risk - the risk that investments do not perform in line with
expectations.
The exposure to the yield and inflation risks described above can be hedged by
investing in assets that move in the same direction as the liabilities in the
event of a fall in yields, or a rise in inflation. The RHM Pension Scheme as a
whole invests directly in interest rate and inflation swaps to protect from
fluctuations in interest rates and inflation and so has largely hedged
inflation and interest rate exposure to the extent of its funding level.
The liabilities of the schemes are approximately 35.0% in respect of former
active members who have yet to retire and approximately 65.0% in respect of
pensioner members already in receipt of benefits.
The weighted average duration of the pension liabilities in the RHM Pension
Scheme is 13.0 years.
All pension schemes are closed to future accrual.
At the balance sheet date, the combined principal accounting valuation
assumptions were as follows:
At 29 March 2025 At 30 March 2024
Discount rate 5.75% 4.80%
Inflation - RPI 3.05% 3.15%
Inflation - CPI 2.65% 2.75%
Future pension increases
- RPI (min 0.0% and max 5.0%) 2.80% 2.90%
- CPI (min 3.0% and max 5.0%) 3.50% 3.55%
For the smaller overseas schemes, the discount rate used was 3.7% (2024: 3.3%)
and future pension increases were 1.8% (2024: 2.1%).
At 29 March 2025 and 30 March 2024, the discount rate was derived based on a
bond yield curve expanded to also include bonds rated AA by one credit agency
(and which might, for example, be rated A or AAA by other agencies).
The Group continued to set RPI inflation in line with the market break-even
expectations less an inflation risk premium. The inflation risk premium of
0.3% (2024: 0.3%), reflects an allowance for additional market distortions
caused by the RPI reform proposals.
The Group has set the CPI assumption by assuming it is 0.9% p.a. lower than
RPI pre 2030 (2024: 0.9% lower pre 2030), reflecting UKSA's stated intention
to make no changes before 2030, and 0.1% lower than RPI post 2030 (2024: 0.1%
lower post 2030), this being our expectation of the long-term average
difference between CPI and CPI-H. Using this approach, the assumed difference
between the RPI and CPI is an average of 0.4% (2024: 0.4%) p.a.
The assumptions take into account the timing of the expected future cashflows
from the pension schemes.
The mortality assumptions are based on the latest standard mortality tables at
the reporting date. The directors have considered the impact of the recent
Covid-19 pandemic on the mortality assumptions and consider that use of the
updated Continuous Mortality Improvement ('CMI') 2023 projections for the
future improvement assumption is a reasonable approach.
The life expectancy assumptions are as follows
At 29 March 2025 At 30 March 2024
Male pensioner, currently aged 65 85.0 84.6 - 86.3
Female pensioner, currently aged 65 87.3 87.0 - 88.1
Male non-pensioner, currently aged 45 86.1 85.8 - 87.2
Female non-pensioner, currently aged 45 89.0 88.8 - 89.5
A sensitivity analysis on the principal assumptions used to measure the scheme
liabilities at the period is as follows:
Change in assumption Impact on scheme liabilities
Discount rate Increase/decrease by 0.1% Decrease/increase by £31.2m/£31.8m
Inflation Increase/decrease by 0.1% Increase/decrease by £14.0m/£13.9m
Assumed life expectancy at age 60 (rate of mortality) Increase/decrease by 1 year Increase/decrease by £88.9m/£91.8m
The sensitivity information has been derived using projected cash flows for
the schemes valued using the relevant assumptions and membership profile as at
29 March 2025. Extrapolation of these results beyond the sensitivity figures
shown may not be appropriate.
Following the desegregation the disclosure of assets and liabilities are
presented in total for the current and prior periods as outlined in the tables
below.
As at 29 March 2025 As at 30 March 2024
Total % of total Total % of total
£m £m
Assets with a quoted price in an active market:
Government bonds 951.0 29.6 1,235.4 34.6
Cash 47.7 1.5 41.3 1.2
Assets without a quoted price in an active market:
Global equities 1.8 0.1 2.1 0.1
Government bonds 31.7 1.0 34.1 1.0
Corporate bonds 10.8 0.3 11.4 0.3
Global property 382.5 11.9 448.6 12.5
Absolute return products 227.8 7.1 244.6 6.9
Infrastructure funds 383.9 11.9 378.5 10.5
Interest rate swaps 224.5 7.0 241.6 6.8
Inflation swaps 19.3 0.6 24.0 0.7
Private equity 334.9 10.4 365.5 10.3
LDI 7.1 0.2 7.2 0.2
Global credit 304.0 9.5 181.2 5.1
Illiquid credit 186.9 5.8 263.3 7.4
Cash 4.0 0.1 4.2 0.1
Other 94.9 3.0 82.0 2.3
Fair value of scheme assets 3,212.8 100% 3,565.0 100%
For assets without a quoted price in an active market, fair value is
determined with reference to net asset value statements provided by third
parties.
Pension assets have been reported using either 28 March 2025 valuations where
daily valuations are available or 31 March 2025 valuations for monthly valued
funds. As is usual practice for pensions assets where valuations at these
dates were not available, the most recent valuations (predominantly at 31
December 2024) have been rolled forward for cash movements to 29 March 2025
and recognised as lagged valuations. This is considered by management the most
appropriate estimate of valuations for these assets using the information
available at the time. At 29 March 2025, the financial statements include
£399.0m of assets (2024: £363.8m) using lagged valuations and were these
lagged valuations to move by 1.0% there would be a £4.0m (2024: £3.6m)
impact on the fair value of scheme assets. This approach is principally
relevant for Private Equity, Property Assets, Illiquid Credits and Global
Credits asset categories. Pension assets valuations are subject to estimation
uncertainty due to market volatility, which could result in a material
movement in asset values over the next 12 months. The amounts recognised in
the balance sheet arising from the Group's obligations in respect of its
defined benefit schemes are as follows:
As at 29 March 2025 As at 30 March 2024
£m £m
Present value of defined benefit obligation (2,564.1) (2,963.5)
Fair value of plan assets 3,212.8 3,565.0
Surplus in schemes 648.7 601.5
The aggregate surplus of £601.5m has increased to a surplus of £648.7m in
the current period. This increase of £47.2m (2024: £164.0m decrease) is
primarily due to higher net interest income on scheme assets and remeasurement
gains on scheme liabilities more than offsetting remeasurement losses on
scheme assets. Further details are provided later in this note.
Changes in the present value of the defined benefit obligation were as
follows:
As at 29 March 2025 As at 30 March 2024
£m £m
Defined benefit obligation at 31 March 2024 / 2 April 2023 (2,963.5) (3,027.3)
Finance cost (136.7) (139.7)
Remeasurement gain 352.4 16.6
Exchange differences 0.9 1.4
Benefits paid 182.8 185.5
Defined benefit obligation at 29 March 2025 / 30 March 2024 (2,564.1) (2,963.5)
Changes in the fair value of plan assets were as follows:
As at 29 March 2025 As at 30 March 2024
£m £m
Fair value of scheme assets at 31 March 2024 / 2 April 2023 3,565.0 3,792.8
Finance income on scheme assets 165.5 176.9
Remeasurement losses (338.8) (254.3)
Administrative costs (9.0) (5.6)
Contributions by employer 9.2 38.7
Additional employer contribution(1) 5.0 3.8
Exchange differences (1.3) (1.8)
Benefits paid (182.8) (185.5)
Fair value of scheme assets at 29 March 2025 / 30 March 2024 3,212.8 3,565.0
(1) Contribution by the Group to the Premier schemes prior to
de-sectionalisation due to the payment of dividends during the year.
The reconciliation of the net defined benefit surplus over the period is as
follows:
As at 29 March 2025 As at 30 March 2024
£m £m
Surplus in schemes at 31 March 2024 / 2 April 2023 601.5 765.5
Amount recognised in profit or loss 19.8 31.6
Remeasurements recognised in other comprehensive income 13.6 (237.7)
Contributions by employer 9.2 38.7
Additional employer contribution(1) 5.0 3.8
Exchange differences recognised in other comprehensive income (0.4) (0.4)
Surplus in schemes at 29 March 2025 / 30 March 2024 648.7 601.5
Remeasurements recognised in the consolidated statement of comprehensive
income are as follows:
52 weeks ended 29 March 2025 52 weeks ended 30 March 2024
Total Total
£m £m
Remeasurement gain on scheme liabilities 352.4 16.6
Remeasurement loss on scheme assets (338.8) (254.3)
Net remeasurement gain/(loss) for the period 13.6 (237.7)
The actual return on scheme assets was a £173.3m loss (2024: £77.4m loss),
which is £338.8m less (2024: £254.3m less) than the finance income on scheme
assets of £165.5m (2024: £176.9m).
The remeasurement gain on liabilities of £352.4m (2024: £16.6m gain)
comprises a gain due to changes in financial assumptions of £344.0m (2024:
£6.9m gain), a gain due to member experience of £1.9m (2024: £21.2m loss)
and a gain due to demographic assumptions of £6.5m (2024: £30.9m gain).
The Group expects to contribute £7.0m annually to its defined benefit schemes
in relation to expenses and government levies up in the 52 weeks to 28 March
2026. An agreement has been reached with the RHM Pension Scheme Trustee to
suspend deficit contributions payments from 1 April 2024, as a result of this
agreement, the Group has entered into a Letter of Credit in favour of the
Scheme, equal to the suspended deficit contributions.
Following the merger and subsequent de-sectionalisation, the Group has
concluded that there is no change currently to the surplus recognition so the
asset has not been restricted and no additional liability has been recognised.
The Virgin Media Limited v NTL Pension Trustees II Limited decision, handed
down by the High Court on 16 June 2023, considered the implications of Section
37 of the Pension Schemes Act 1993. Section 37 of the Pension Schemes Act 1993
only allowed the rules of contracted-out schemes in respect to benefits, to be
altered where certain requirements were met. Following an appeal on 25 July
2024, the Court of Appeal upheld the High Court's decision, that the statutory
actuarial confirmation was required, and without this, alterations to schemes
were void. There is also potential for legislative intervention following
industry lobbying efforts that may retrospectively validate certain rule
amendments.
The Trustee has begun the process of assessing amendments to identify any
matters that might indicate a material risk of non-compliance with Section 37
of the Pension Schemes Act 1993. At the date of signing none had been
identified.
The total amounts recognised in the consolidated statement of profit or loss
are as follows:
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Period ended 29 March 2025 / 30 March 2024
Operating profit
Administrative costs (9.0) (5.6)
Net finance credit 28.8 37.2
Total credit 19.8 31.6
Defined contribution schemes
A number of companies in the Group operate defined contribution schemes,
including provisions to comply with auto enrolment requirements laid down by
law. In addition, a number of schemes providing life assurance benefits only
are operated. The total expense recognised in the statement of profit or loss
of £10.8m (2024: £10.2m) represents contributions payable to the schemes by
the Group at rates specified in the rules of the schemes.
8. Notes to the cash flow statement
Reconciliation of profit before taxation to cash flows from operations
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Profit before taxation 161.3 151.4
Net finance cost 19.8 26.3
Operating profit 181.1 177.7
Depreciation of property, plant and equipment 19.6 19.5
Amortisation of intangible assets 26.3 25.8
Impairment of non-current assets¹ - 6.2
Net gain on disposal of non-current assets (0.2) (0.2)
Fair value movements on foreign exchange and other derivative contracts (0.3) 1.1
Net finance income on pensions and administrative expenses (19.8) (31.6)
Equity-settled employee incentive schemes 4.6 4.4
Increase in inventories (2.6) (7.5)
Decrease/(increase) in trade and other receivables 2.3 (16.9)
(Decrease)/increase for other payables and provisions (8.2) 10.4
Additional employer contribution² (5.0) (3.8)
Contribution to defined benefit pension schemes (9.2) (38.7)
Cash generated from operations 188.6 146.4
¹ Impairment of non-current assets in the prior year primarily relates to the
closure of the Knighton and Charnwood sites.
²Contribution by the Group to the Premier sections (prior to the
de-sectionalisation) due to the payment of dividends during the year.
Reconciliation of cash and cash equivalents to net borrowings
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Net inflow of cash and cash equivalents 89.2 38.9
Movement in lease liabilities 2.3 1.1
Debt issuance costs in the period 3.8 0.5
Other non-cash movements (3.3) (1.8)
Decrease in borrowings net of cash 92.0 38.7
Total net borrowings at beginning of period (235.6) (274.3)
Total net borrowings at end of period (143.6) (235.6)
Analysis of movement in borrowings
As at Cash flows Non-cash finance costs Other As at
31 March 2024
non-cash movements
29 March 2025
£m £m £m £m £m
Cash and bank deposits 102.3 89.2 - - 191.5
Net cash and cash equivalents 102.3 89.2 - - 191.5
Borrowings - Senior Secured Fixed Rate Notes maturing October 2026 (330.0) - - - (330.0)
Lease liabilities³ (12.2) 3.4 (0.7) (0.4) (9.9)
Gross borrowings net of cash(1) (239.9) 92.6 (0.7) (0.4) (148.4)
Debt issuance costs(2) 4.3 3.8 (1.9) (1.4) 4.8
Total net borrowings(1) (235.6) 96.4 (2.6) (1.8) (143.6)
(1 .) Borrowings exclude derivative financial instruments
(2) The non-cash finance costs movement in debt issuance costs relates to the
amortisation of capitalised borrowing costs and other non-cash movements
relates to the write off of previously capitalised borrowing costs(.)
³ The non-cash finance costs relate to IFRS16 interest.
Cash outflows of £3.4m (2024: £2.6m) in relation to repayments of lease
liabilities have been included in the consolidated statement of cash flows,
including £0.7m included in finance costs paid within cash flows from
operating activities.
The Group has the following cash pooling arrangements in sterling, euros and
US dollars, where both the Group and the bank have a legal right of offset.
As at 29 March 2025 As at 30 March 2024
£m £m
Offset asset Offset liability Net offset asset Offset asset Offset liability Net offset asset
Cash, cash equivalents and bank overdrafts 2.0 - 2.0 16.0 (12.5) 3.5
9. Financial instruments
The following table shows the carrying amounts (which approximate to fair
value except as noted below) of the Group's financial assets and financial
liabilities. Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Set out below is a summary of methods
and assumptions used to value each category of financial instrument.
As at 29 March 2025 As at 30 March 2024
Carrying amount Fair Carrying amount Fair
value
value
£m £m £m £m
Financial assets at amortised cost:
Trade and other receivables 61.2 61.2 72.7 72.7
Cash and cash equivalents 191.5 191.5 102.3 102.3
Financial assets at fair value through profit or loss:
Trade and other receivables 14.1 14.1 7.8 7.8
Derivative financial instruments
- Forward foreign currency exchange contracts 0.1 0.1 - -
Financial liabilities at fair value through profit or loss:
Derivative financial instruments
- Forward foreign currency exchange contracts (0.6) (0.6) (0.8) (0.8)
Other financial liabilities at fair value through profit or loss:
- Deferred contingent consideration (18.8) (18.8) (19.1) (19.1)
Financial liabilities at amortised cost:
Trade and other payables (250.0) (250.0) (255.8) (255.8)
The following table presents the Group's assets and liabilities that are
measured at fair value using the following fair value measurement hierarchy:
· Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1).
· Inputs other than quoted prices included within level 1 that are observable
for the asset or liability, either directly (that is, as prices) or indirectly
(that is, derived from prices) (level 2).
· Inputs for the asset or liability that are not based on observable market data
(that is, unobservable inputs) (level 3).
As at 29 March 2025 As at 30 March 2024
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
£m £m £m £m £m £m
Financial assets at fair value through profit or loss:
Trade and other receivables - 11.7 2.4 - 4.9 2.9
Derivative financial instruments
- Forward foreign currency exchange contracts - 0.1 - - - -
Financial liabilities at fair value through
profit or loss:
Derivative financial instruments
- Forward foreign currency exchange contracts - (0.6) - - (0.8) -
Other financial liabilities at fair value through
profit or loss:
-Deferred contingent consideration - - -
- (18.8) (19.1)
Financial liabilities at amortised cost:
Senior secured notes (325.0) - - (315.0) - -
10. Bank and other borrowings
As at As at
29 March 2025 30 March 2024
£m £m
Current:
Lease liabilities (1.9) (2.7)
Total borrowings due within one year (1.9) (2.7)
Non-current:
Transaction costs(1) 4.8 4.3
Senior secured notes (330.0) (330.0)
(325.2) (325.7)
Lease liabilities (8.0) (9.5)
Total borrowings due after more than one year (333.2) (335.2)
Total bank and other borrowings (335.1) (337.9)
(1)Included in transaction costs is £3.2m (2024: £1.6m) relating to the
revolving credit facility.
Secured senior credit facility - revolving
During the period, the Group signed a new five-year revolving credit facility
(RCF) agreement with an increased facility limit of £227.5m (prior facility
£175.0m). Transactions costs of £3.8m were capitalised in relation to this
extension. The RCF attracts a leverage-based margin of between 1.8% and 3.5%
above SONIA.
The covenant package attached to the revolving credit facility is:
Net debt/ EBITDA(1) Net debt / Interest(1)
2025 FY 3.50x 3.00x
2026 FY 3.50x 3.00x
(1)Net debt, EBITDA and Interest are as defined under the revolving credit
facility agreement.
Senior secured notes
The senior secured notes are listed on the Irish GEM Stock Exchange. The notes
totalling £330m mature in October 2026 and attract an interest rate of 3.5%.
11. Dividends
The following dividends were declared and paid during the period:
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Ordinary final of 1.728 pence per ordinary share (2024: 1.44 pence) 14.9 12.4
After the balance sheet date, a final dividend for the period ended 29 March
2025 of 2.80 pence per qualifying ordinary share (2024: 1.728 pence) was
proposed for approval at the Annual General Meeting on 17 July 2025 and will
be payable on 25 July 2025. Dividend distributions are recognised as a
liability in the period in which the dividends are approved by Group's
shareholders.
12. Capital commitments
The Group has capital expenditure on property, plant and equipment contracted
for at the end of the reporting period but not yet incurred at 29 March 2025
of £15.3m (2024: £17.3m).
13. Contingencies
There were no material contingent liabilities at 29 March 2025 (2024: none).
14. Related party transactions
There has been no material change to transactions with related parties during
the period.
15. Subsequent events
On 15 May 2025, the directors have proposed a final dividend of 2.80 pence for
the period ended 29 March 2025 for approval at the Annual General Meeting. See
note 11 for more details.
On 15 May 2025 the Group announced the Revolving Credit Facility had been
increased to £282.5m, exercising an accordian option within the facility
agreement.
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