Premier Foods sales surge during coronavirus lockdown
Mr Kipling cakes maker Premier Foods has swung to a full-year profit, after a jump in sales due to the coronavirus lockdown.
The figures
Premier Foods revenue for the full year edged up 2.8 per cent to £847.1m, while revenue for the fourth quarter increased 3.6 per cent.
Trading profit rose 3.2 per cent to £132.6m, which the company said was at the top end of market expectations.
Profit before tax swung to a profit of £53.6m, reversing the £42.7m loss made in the previous year.
The company also reversed a four pence loss per share to a basic earnings per share of 5.5p.
Net debt was reduced by £61.8m, pn pre-IFRS 16 basis, to £408.1m for the full year.
Why it’s interesting
Premier Foods said it had been a “year of substantial progress” as it started to reverse the losses seen in the previous year.
The pandemic and subsequent lockdown has helped Premier Foods as “Britain has got cooking again”. Demand for food items has surged which has led to “unprecedented levels of demand”.
Sales in its grocery division grew 3.3 per cent to £514.7m in the year. It increased 5.6 per cent in the fourth quarter when lockdown restrictions came into place.
The group has therefore said it anticipates revenue in the first quarter of the next financial year to be “approximately 20 per cent ahead of the same quarter a year ago reflecting continued strong demand for the group’s product ranges”.
Premier Foods also announced that, following a strategic review, it was looking for a simplification of its pension funds exposure. The group said it had the potential to “significantly reduce future funding requirements for the group.”
What Premier Foods said
Chief executive Alex Whitehouse said:
We have now grown Group revenues, Trading profit and adjusted earnings for each of the last three years, driven by our successful branded growth model of delivering insightful new product innovation together with emotionally engaging advertising and building strategic retailer partnerships…
During the outbreak of COVID-19, food has been identified by the Government as a key industry and we feel privileged to play our part in keeping the nation fed. One of the most prevalent trends we have seen during the lockdown is that Britain has got cooking again, with particularly high levels of demand for items relating to meal preparation, including cooking sauces, gravy and baking ingredients.