Premier butters up Hovis

Reporting the company’s 2008 results today (5 March), Premier Foods’ chief executive Robert Schofield said the Group made significant progress over the course of 2008. He went on: “We completed our manufacturing rationalisation programme, closing 9 factories over a 12 month period, implemented SAP in our grocery division and successfully relaunched Hovis, our biggest brand. Additionally, we are pleased by the trading performance of the business which has demonstrated resilience against the backdrop of a challenging economic environment.” Schofield said Premier had recognised soon after their acquisition that RHM that Hovis required a new strategy. “We have invested £16m on recipe improvements, we introduced redesigned packaging and the ‘Come on lad’ advertising campaign won the 2008 'Advertising Campaign of the Year' award. Most importantly though, the consumer has responded positively to the relaunch and Hovis' market share has risen by 2.4 percentage points to 24.7% since August 2008. "We have now completed our capital structure review and have proposed raising approximately £404m gross equity proceeds, which we believe, combined with the amended lending agreement and new pensions framework agreement we have announced today, will put in place a more appropriate capital structure for the business going forward and provide a solid platform for Premier's future development. "One of the most pleasing aspects of the business in 2008 is how robust trading has been during a tough period for consumer-facing businesses. We believe that with the momentum developed in our grocery business over the last four months of 2008, combined with the successful relaunch of Hovis and the remaining integration synergies, we are well positioned for further progress in 2009." Reported turnover for the year was up 22.5% at £2.6 billion (2007: £2.1bn). Reported pre-tax losses of £404 million (- £77.6m) looked at on an adjusted basis were a positive £194 million (£171m).