REG - Premier Foods plc Premier Foods Fin - Trading Statement

Premier FoodsAnnouncement

19/01/2023 07:00

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RNS Number : 1899N  Premier Foods plc  19 January 2023

19 January 2023

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

 

 A strong Quarter 3, well on track to deliver full year expectations

Premier Foods today provides its Quarter 3 trading update for the thirteen
weeks ended 31 December 2022

 ·         Q3 Group sales up 12.0% versus prior year; Q3 Branded sales up 8.8%
 ·         Particularly strong Grocery performance, Q3 sales up 17.4%
 ·         Grocery business continues to grow faster than its markets, gaining 66 basis
           points of value share(1)
 ·         Sweet Treats Q3 sales down (0.9%)
 ·         International sales up 10%(2), another quarter of double-digit growth
 ·         Announcing proposed closure of loss-making, predominantly non-branded,
           Knighton manufacturing site
 ·         Well on track to deliver on FY22/23 expectations

 

Note: Headline results presented for the quarter exclude The Spice Tailor
unless otherwise stated

 

 Alex Whitehouse, Chief Executive Officer

 

"We delivered a strong trading performance in our important third quarter,
with sales growth of 12% compared to the same period last year. These results
illustrate the continuing appeal of our portfolio of market-leading brands in
such a challenging environment and demonstrate the strength and resilience of
our branded growth model."

 

"Our major Grocery brands produced a particularly good set of results for us,
continuing to grow faster than the market, taking 66 basis points of share(1).
Across the country, people got cooking again this Christmas, demonstrating
that the Best Restaurant in Town really is at home. Many of our leading brands
grew strongly, with established seasonal favourites including Ambrosia custard
and new launches such as Bisto pigs-in-blankets gravy granules all proving
very popular. Mr Kipling had another strong performance, with the introduction
of our non-HFSS Deliciously Good Festive Pies helping to grow our Mince Pie
market share. Meanwhile, our International business has now reported another
quarter of double-digit sales growth, with Sharwood's growing over 20%
following major new listings in Canada."

 

"Input cost inflation remains at elevated levels, and we continue to take
action to offset this inflation through a range of measures. With strong
trading momentum as we enter our final quarter of the year, and with more
brand investment and new product launches to come, we are well on track to
deliver on expectations for the full year."

 Trading update

 

Grocery

The Grocery business enjoyed a particularly strong quarter as total sales
increased by 17.4% and branded sales grew by 15.5% versus last year. This
growth was broad based, with all of the Group's major brands performing
strongly; demonstrating the continued effectiveness of the Group's proven
branded growth model. Pricing contributed a significant proportion of revenue
growth in the quarter and demand was particularly buoyant running into the key
festive period. Sales of The Spice Tailor again grew by double-digit and its
integration into the Group continues to progress well. Additionally, the 'Best
Restaurant in Town' campaign, which helps people cook and prepare tasty and
affordable meals, has been well received, and will be extended further in Q4.
Non-branded sales grew by 29.6% due to pricing benefit in retailer branded
product categories and continued recovery in out of home sales compared to the
prior year.

 

Sweet Treats

Sweet Treats sales were (0.9%) lower in the period, with branded sales down
(10.8%) and non-branded sales up 22.8%. Mr Kipling sales increased in the
quarter helped by growth of Angel, Lemon and Chocolate slices, and the launch
of new non-HFSS(3) Mr Kipling Deliciously Good Festive Pies delivered market
share gains in the Mince Pie category. Cadbury cake was impacted by some
unscheduled maintenance associated with one plant line, which has since been
completed and full production now resumed. The continued growth trend in
Non-branded Sweet Treats was again due to contract gains in pies and tarts as
well as pricing benefits.

 

International

International continues to progress strongly, reporting another quarter of
double-digit sales growth in Quarter 3. Sales increased by 10%(2) in the
period reflecting growth of Sharwood's and Mr Kipling, notably in Canada and
Europe. Sharwood's sauces growth was particularly strong in Canada due to new
listings in Walmart. In Australia, Mr Kipling cake again increased sales in
double-digit percentage terms and continues to grow share and household
penetration. Following a successful test of Mr Kipling in US Target stores,
the Group is now exploring opportunities for further distribution expansion.

 

 Proposed closure of Knighton manufacturing site

 

Knighton manufactures predominantly non-branded powdered beverages, so is not
aligned to the Group's branded growth model strategy and is marginally
unprofitable at Trading profit. Following a comprehensive review of the site,
the Company is entering into colleague consultation on its proposed closure.

 

Under these proposals, effective from mid-2023, non-branded revenue contracts
of c.£27m sales will be carefully managed for exit. Cash exceptional costs of
c.£10m associated with closure are expected to be incurred in FY23/24. This
proposed closure will be accretive to Trading profit and increase branded
sales mix by 270 basis points.

 

It is recognised that this will be an unsettling time for those c.300
colleagues who are potentially affected by these proposals, and they will be
fully supported and consulted with throughout the process.

 

 Outlook

 

The Group has delivered another strong quarter of trading, further
demonstrating the strength and resilience of its branded growth model, set
against the backdrop of a particularly challenging consumer environment. Input
cost inflation remains at elevated levels and is being offset through a
combination of cost savings and annual price increases. With strong momentum
entering the fourth quarter of the year, and more brand investment and new
product launches to come, the Group remains well on track to deliver on
expectations for this financial year. In the medium-term, the Company expects
to make further significant strategic progress, through delivery of its five
pillar growth strategy.

 

~ Ends ~

 

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

 

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

 

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

 

 Conference call

 

A conference call for investors and analysts hosted by Alex Whitehouse, CEO
and Duncan Leggett, CFO, will take place today, 19 January 2023, at 9.00am,
details of which are outlined below.  A replay 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 number:  0800 640 6441 (UK toll free)
                    +44 20 3936 2999 (standard international access)
                    Access code: 216675

- Ends -

 

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

 

Notes to editors:

 

 Q3 Sales (£m)   FY22/23           The Spice Tailor  FY22/23               FY21/22    Change vs 1 year ago

                 (including TST)                     (excluding TST)                  (excluding TST)
 Grocery
 Branded         201.6             3.7               197.9                 171.3      15.5%
 Non-branded     34.0              -                 34.0                  26.2       29.6%
 Total           235.6             3.7               231.9                 197.5      17.4%

 Sweet Treats
 Branded         52.2              -                 52.2                  58.5       (10.8%)
 Non-branded     30.2              -                 30.2                  24.6       22.8%
 Total           82.4              -                 82.4                  83.1       (0.9%)

 Group
 Branded         253.8             3.7               250.1                 229.8      8.8%
 Non-branded     64.2              -                 64.2                  50.8       26.3%
 Total           318.0             3.7               314.3                 280.6      12.0%

 

 Q3 YTD Sales (£m)   FY22/23           The Spice Tailor  FY22/23               FY21/22    Change vs 1 year ago

                     (including TST)                     (excluding TST)                  (excluding TST)
 Grocery
 Branded             458.8             5.0               453.8                 416.2      9.0%
 Non-branded         80.8              -                 80.8                  65.4       23.5%
 Total               539.6             5.0               534.6                 481.6      11.0%

 Sweet Treats
 Branded             154.5             -                 154.5                 158.5      (2.5%)
 Non-branded         43.7              -                 43.7                  34.6       26.4%
 Total               198.2             -                 198.2                 193.1      2.6%

 Group
 Branded             613.3             5.0               608.3                 574.7      5.9%
 Non-branded         124.5             -                 124.5                 100.0      24.5%
 Total               737.8             5.0               732.8                 674.7      8.6%

 

 1.       Market share data sourced from IRI, 12 weeks ended 31 December 2022
 2.       International sales stated on a constant currency basis
 3.       Non-HFSS: Food or drinks not high in fat, salt or sugar
 4.       Sales data is for the thirteen weeks to 31 December 2022 and the comparative
          period, the thirteen weeks ended 1 December 2022. Headline results in the
          statement are stated excluding The Spice Tailor
 5.       All financial data detailed above is unaudited and has not been subject to
          review by the Company's auditors
 6.       Additional notes on the Knighton manufacturing site proposed closure:
 ·                                    Group revenue branded mix will increase by c.270 basis points to c.89% (on
                                      FY21/22 pro forma basis)
 ·                                    Cash exceptionals of c.£10m are expected to be incurred in FY23/24 to cover
                                      redundancy and restructuring costs. These costs will be provided for in
                                      FY22/23 under non-trading items within Operating profit. There will be no cash
                                      exceptional costs incurred in FY22/23.
 ·                                    Certain branded products currently manufactured at Knighton will be
                                      transferred to other Group sites, with no changes expected to take effect
                                      until mid-2023

 

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