REG - Premier Foods plc Premier Foods Fin - Quarter 1 Trading Update

Premier FoodsAnnouncement

18/07/2024 07:00

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RNS Number : 8380W  Premier Foods plc  18 July 2024

 

18 July 2024

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

 

 Strong volume led branded sales growth

Premier Foods today provides its Quarter 1 trading update for the thirteen
weeks ended 29 June 2024

 

 ·         Q1 Group sales up 5.3% versus prior year, Branded sales up 7.3%
 ·         Grocery branded sales up 8.6%, Sweet Treats branded sales up 3.5%
 ·         Volume growth and market share gains in both Grocery and Sweet Treats
 ·         New categories sales up 68%; led by Ambrosia Porridge pots and Ice-cream
 ·         International4 sales up 24%
 ·         New larger five year Revolving Credit Facility signed on improved terms
 ·         FY24/25 full year expectations unchanged

 

 Alex Whitehouse, Chief Executive Officer

 

"We've delivered another quarter of strong branded sales growth, yet again
demonstrating the strength of our portfolio and the effectiveness of our
branded growth model.  During the quarter, we have gained both value and
volume market share in Grocery and Sweet Treats, as more shoppers bought more
of our leading brands, delivering good volume growth across our categories. Mr
Kipling, Nissin and The Spice Tailor were standout performers, and we
continued to launch new products across the portfolio. International sales
grew by 24%, with strong growth in each of our overseas regions, and sales
from new categories increased by 68%, led by Ambrosia porridge pots and Angel
Delight ice-cream."

 

"As we look forward to the rest of the year, we have a strong set of marketing
and product innovation plans for our brands in the UK and Ireland, while we
continue to build distribution internationally. We expect to see more volume
led branded sales growth in the coming quarters, further progress overseas and
our expectations for the full year remain unchanged."

 

 Trading update

 

Grocery

Grocery revenue increased by 7.1% in the quarter, led by a strong branded
performance, with branded sales growing by 8.6%. As expected, this volume led
growth was due to continued strong execution of the branded growth model and
partly reflecting sharper promotional pricing. Consequently, market share grew
in both value and volume terms, and follows the track record of 200 basis
points of share gains in the three years to FY23/24.

 

Many of the Group's Grocery brands delivered substantial growth, with Nissin
and The Spice Tailor both contributing strongly to performance in the quarter.
New product development in the period included Loyd Grossman Tomato &
Mascarpone cooking sauces and The Spice Tailor Chinese kits. New categories
revenue increased by 68% as Ambrosia Porridge pots continues to take a larger
share of the category with more consumers building it into their morning
routine. Angel Delight ice-cream was also boosted by the launch of the
handheld format. Non-branded revenue declined (5.1%) partly due to consumers
switching to brands and some contract exits.

 

Sweet Treats

Sweet Treats delivered sales of £59.9m in the quarter, 0.4% ahead of last
year. Branded sales increased by 3.5% in the period, with market share
increasing in both volume and value terms, partly reflecting more competitive
promotional pricing of brands, winning consumers at the expense of own label.
Mr Kipling Signature Brownie Bites continues to perform well in market and
instore execution of both Mr Kipling and Cadbury cake was also a strong
contributor of growth in the period. Product innovation launched in the
quarter included Mr Kipling Caramel Tarts and Mr Kipling Strawberry &
Cream Fancies. Non-branded sales were 16.0% lower reflecting the movement of
consumers to brands and the impact of contract exits.

 

International

Overseas sales were strong, increasing by 24%(4) compared to the prior year.
North America revenue grew by 21% as Mr Kipling cake was rolled out across 800
stores in Canada and the first sales of The Spice Tailor commenced in the USA.
EMEA delivered revenue growth of 6% with Germany being the latest country to
achieve listings of The Spice Tailor, taking the total number of countries
listing the brand to 11. Revenue also increased substantially in Australia,
following the launch of new family-size Sharwood's Indian cooking sauces
while, as previously reported, benefiting from a softer comparative period in
cake associated with retailer de-stocking in the prior year.

 

 New Revolving Credit Facility

 

The Group recently completed the signing of a new five year £227.5m revolving
credit facility, effective July 2024 and replaces the previous £175m
facility. This new agreement is on improved terms, attracting a margin(6) of
2.0% above SONIA. The Group's cash guidance for FY24/25 remains unchanged.

 

 Outlook

 

As anticipated, the Group delivered further volume led revenue growth in the
first quarter, accompanied by sharper promotional investment and market share
gains. This year, the Group expects to deliver further volume led branded
sales growth, progress against its strategic pillars and full year
expectations for FY24/25 are unchanged.

 

Following the suspension of deficit contribution payments, the Group has a
number of options to invest in the business at attractive returns to increase
efficiency and innovation, while continuing to explore M&A opportunities
and apply its progressive approach to dividends.

 

 Further information

 

A conference call for investors and analysts hosted by Alex Whitehouse, CEO,
and Duncan Leggett, CFO, will take place today, 18 July 2024, at 9:00am BST.
Dial in details are outlined below. A recording of the conference call will be
available on the Company's website later in the day:
www.premierfoods.co.uk/investors/results-centre
(http://www.premierfoods.co.uk/investors/results-centre)

 

 

 Telephone:    0800 358 1035 (UK toll free)
               +44 20 3936 2999 (standard international access)
 Access code:  687751

 

 

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 Communications

 

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

 

- Ends -

 

Notes to editors:

 1.  Sales data is for the thirteen weeks to 29 June 2024 and 1 July 2023
 2.  Sales disclosed include acquisitions and exclude Charnwood Foods, the closure
     of which is due this financial year
 3.  Market share data sourced from IRI, 12 weeks ended 29 June 2024
 4.  International sales are stated on a constant currency basis. Sales to Ireland
     were previously included in International; following an internal
     reorganisation these are now included as part of our UK business
 5.  All financial data is unaudited and has not been subject to review by the
     Company's auditors
 6.  The Revolving Credit Facility attracts a margin on a ratchet grid according to
     latest reported Net debt/EBITDA

 

 

 

 Q1 Sales (£m)   FY24/25      FY23/24    Change vs 1 year ago
 Grocery
 Branded         161.9        149.2      8.6%
 Non-branded     17.5         18.4       (5.1%)
 Total           179.4        167.6      7.1%

 Sweet Treats
 Branded         51.9         50.1       3.5%
 Non-branded     8.0          9.5        (16.0%)
 Total           59.9         59.6       0.4%

 Group
 Branded         213.8        199.3      7.3%
 Non-branded     25.5         27.9       (8.8%)
 Total           239.3        227.2      5.3%

 

 

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",
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"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.

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