“We are pleased to report another quarter of growth, with sales up +1.7% compared to last year,” said chief executive officer (CEO) Gavin Darby. “Our biggest brand, Mr Kipling, led the charge with an excellent performance on the back of its recent brand relaunch with sales up +14% in the UK.”
Darby, who is braced for prominent shareholders to vote against his re-election as CEO in Premier Foods’ annual general meeting today (18 July), claimed 4.5% sales growth for the company over the past six months.
He said the results showed the company’s strategy of product innovation and strategic partnerships was working and promised “further exciting innovation across our branded portfolio to come in the months ahead”.
Own-label
However, while branded products had achieved total sales growth of 1.1% for the business, own-label product sales chalked up stronger growth of 4.8% over the period. In addition, sales of branded products dipped by 1.5% in grocery channels.
Exports also grew strongly, chalking up 4% in the latest quarter and 20% in the past two quarters.
Batchelors Super Noodles pots and Pasta ‘n’ Sauce pots grew by over 50% in the quarter. Sales of Bisto were slower towards the end of the first quarter as category volumes declined due to warmer weather experienced in the UK. Angel Delight again saw double-digit sales growth in the quarter, while Loyd Grossman sales were lower due to changes in the phasing of promotional activity. Nissin branded products Soba Noodles and Cup Noodle grew by nearly 80% compared to the same period a year ago.
Batchelors
In the grocery business, Batchelors continued to display the excellent growth trends it has delivered over the last year, with further demonstration that its innovation strategy, aligned to key consumer trends is working. Batchelors Super Noodles pots and Pasta ‘n’ Sauce pots grew by more than 50% in the quarter.
Own-label sales of sweet treats dropped by £0.4m as Premier Foods exited two customer contracts. Own-label grocery sales rose by 9.1%, aided by the growth of stuffing and foodservice contracts with continued good momentum from powdered products business Knighton Foods.
Premier Foods reported that it had successfully completed the second phase of consolidation of its warehousing and distribution operations into one central location during the first quarter of 2018. It expected its Tamworth facility in Warwickshire to complete the third and final phase of the project in the second quarter of the year.
Debt
The company said its board was committed to continuing its strategy of improving performance and reducing net debt by £25m a year.
Shareholder group Oasis Management Company, which holds a 17.3% stake in Premier Foods, has opposed Darby’s re-election as CEO, as has US group Paulson & Co, which has a 6% share. The company board and other prominent shareholder factions have backed Darby.
In May, Premier Foods posted its strongest sales growth in five years in its results for the year to 31 March 2018.
Meanwhile, read our exclusive interview with Gavin Darby’s on his leadership of Premier Foods, first published in the July issue of Food Manufacture.