Premier Foods expects sales and profits growth

In a trading update, Premier said it was pleased to report good progress in 2009, and expected encouraging branded sales growth of 6.4% and market share gains in its key branded categories. "We expect to announce total sales for 2009 of £2,661m, up 2.2% on 2008, with branded sales for the year of £1,678m representing 63% of total Group sales compared to 61% in 2008," the update statement said. "We expect to report trading profit of around £320m, an increase of approximately 3.5% on 2008 and net regular interest of around £155m. Adjusted Profit before tax1 is expected to be around £165m. The group's grocery business made good progress helped by strong performances by Ambrosia and Hartley's in desserts Loyd Grossman and Homepride in cooking sauces, Branston beans and relishes and Batchelor's soup and noodles. As a result, we have taken market share2 in our key branded categories. This had been achieved against a backdrop of significant increases in input costs largely offset by pricing and better procurement. The Hovis division also had a successful year leading bakery sales for the year of £370m – up 13.3%. Annual sales for Premier's chilled retailer brand ready meals and cake businesses reached £214m, an increase of 5.5%. Sales growth was driven by new contracts and the launch of new branded products such as Loyd Grossman pizzas and Mr Kipling Christmas puddings. However, profit for the meat-free business was adversely impacted by increased manufacturing cost and a restructuring of the supply chain to improve manufacturing and logistical efficiency in the business has begun. "We intend to complete this restructuring by the middle of 2010 following which we would expect growth to resume," Premier said.