Premier Foods serves up Christmas sales rise

Andrew Cummings
January 16, 2018

Premier Foods' Mr Kipling and Cadbury cake sales have fallen in the past three months - although the business has reported strong growth in its own-label cake business.

Shares in Premier Foods were reportedly up 2% on Monday morning, following the company's announcement.

The group's growth came predominantly from its unbranded business.

Premier said an extra four million mince pies sold in 2017 saw it notch up another record for the festive favourite, pushing sales of non-branded sweet treats up by 19.6 per cent over its third quarter.

Branded grocery sales rose 3.4 per cent in the quarter and were 13.9 per cent higher for its non-branded groceries thanks to some recent contract wins, including for stuffing.

A weekend newspaper report said Premier Foods was in talks to sell its Batchelors brand to Japan's Nissin Foods, its biggest shareholder with a almost 20 percent stake.

The British group, which also owns brands including Ambrosia, Angel Delight and Bisto, said that although it did regularly review "options to deliver value for all of its stakeholders" and such reviews did involve discussions with third parties, including Nissin, there was "no current situation where discussions have gone beyond an exploratory stage".

"If people had said a year ago that we'd be reporting a 4 per cent rise in sales this quarter, you'd have said that would be highly improbable", said Mr Darby.

The company has struggled under a heavy debt burden and pressure from investors after it rejected a takeover bid in 2016 from McCormick.

Mr Darby said he hoped, over the next 12 months, to announce that global sales had doubled from 4 per cent three years ago. Premier Foods also now uses Nissin's manufacturing facility in Hungary and said that its range of Batchelor's noodles in a pot had generated more than £5m in sales since its launch previous year. Overall revenue growth is good, sustaining the better momentum recorded in Q2.

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