Economic Situation is “More Uncertain” After Brexit says Premier Foods Boss

21 Jul 2016 --- Premier Foods, the UK food company, has reported group sales were up nearly 2 percent in the thirteen weeks to July 2, helped by the performance of brands such as its Loyd Grossman sauces and Bisto gravy brand.

Premier Foods, which rejected a takeover approach by US company McCormick earlier this year, said the economic environment post-Brexit is "more uncertain” but that its financial exposure was limited.

Gavin Darby, chief executive, said: “We are very pleased by the further improvement in our sales performance, which demonstrates four consecutive quarters of growth and continued momentum in the business.”

“Our category strategy of investing behind our brands continues to deliver results, despite the wider deflationary grocery market in the UK. “

“While the economic environment is more uncertain following the EU referendum outcome, our immediate financial exposure is expected to be limited. Given our strong brands and UK manufacturing cost base, we believe we remain well placed to make progress and our expectations for the full year remain unchanged."

Overall, sales grew 1.9 percent in the period.

Across its brands, Ambrosia returned to growth in the quarter, following the launches of the new Deluxe custard range and frozen custard ice-cream.

Additionally, the brand benefitted from TV advertising in the period with the 'Taste of Happy' campaign and the deluxe range performing particularly well.

In the second half of the year, Premier Foods is planning to make a significant investment in its Bachelors soup range, with new products including High Veg pots, High Protein Pots and Soup Dippers launching.

Sweet Treats continued to benefit from strong Cadbury cake performances, reflecting continued growth of new products such as Cadbury Amaze Bites while also seeing strong sales from the core Cadbury cake range.

Non-branded Sweet Treats grew by 11..9 percent due to contract wins in both major retailers and the discounters' channel, while Mr Kipling sales were lower as a result of higher promotional activity in the prior year period.

The Cake-On-The-Go range of twin pack Mr Kipling and Cadbury cakes designed for the convenience market is building distribution and seven different formats are now available in market.

The launch of the Mr Kipling Cup Cake range exclusively in one major retailer is also performing well.

International sales grew around 5 percent in the quarter due to a strong performance in Australia and the business unit has now delivered growth for seven successive quarters.

Premier Foods said it is also making progress in extending its cake brands in the US and the Middle East.