Premier Foods ups full-year guidance after 'exceptional' quarter

Premier Foods has upped its full-year profit guidance, after the introduction of fresh lockdown restrictions saw people spend more on eating at home during the key festive trading season.

Updating on third-quarter trading, the owner of Mr Kipling, Ambrosia and Oxo, among others, said group sales rose 9.0% in the 13 weeks to 26 December. Within that, non-branded sales eased 2.7%, but branded sales jumped 12.1%

Group sales are now ahead 12.5% for the year to date.

Combined with a planned increase in marketing investment in the current quarter, Premier said that trading profit is expected to be in the range of £145m to £150m, with net debt/EBITDA to fall below 2.0 times by the year end.

Chief executive Alex Whitehouse said growth during the quarter had been "exceptional", with people turning to Premier’s ranges following increased restrictions on out-of-home eating.

Sales of Sharwood cooking sauces rose by 40%, supported by the launch of new product ranges, while Bisto and Batchelors reported double-digit sales growth. UK sales of Mr Kipling were ahead 7%.

Whitehouse said: "Together with excellent execution both instore and online, we continue to take market share in volume and value terms. Online sales were up 90% in the quarter, ahead of the broader channel, and we saw higher household penetration for brands such as Bisto, Oxo and Paxo as more meals were eaten at home this Christmas.

"Looking to the remainder of the year, out-of-home eating is likely to remain heavily restricted and we therefore expect to see continued high levels of consumer demand for products."

International sales during the quarter rose 43%, boosted in part by stockpiling ahead of the end of the transition period and the UK’s departure from the European Union on 31 December. The FTSE 250 firm also signed an agreement with Weston Foods during the quarter to sell Mr Kipling in the US, with the first shipments due to the start in the first quarter of the 2021/22 financial year.