On the face of it, this morning's 2011 financial results from Premier Foods, the UK's largest food manufacturer, make less than appetising reading.

Trading profit down 29%, sales falling year-on-year, and an operating loss of over GBP176m (US$279.2m), compared to an operating profit of almost GBP220m in 2010. It was a year in which Premier saw significant change - businesses sold, a new CEO and a refocused business strategy - but it was also another challenging 12 months for the Hovis and Mr Kipling maker.

Premier and CEO Michael Clarke, the former Kraft Foods executive, are trying to look to the future with optimism. The company is focusing on eight so-called "power brands", is planning to continue to offload assets (Hartley's and Haywards are two brands said to be up for sale) and it has a new financing deal that has given it some breathing space.

"We intend to draw a line under the performance of 2011," Clarke said today. "Having put the financing and strategic building blocks in place, our immediate priorities are to implement this re-financing package, continue stabilising the business, re-focus the portfolio and invest in our future growth."

There is, however, some uncertainty around Premier's future. Some analysts are concerned that further disposals could reduce the company's ability to generate cash and mean its pension liabilities grow, relative to the size of the business that is left. Premier plans to invest in marketing its eight flagship brands but, in this trading environment, it is by no means certain that that investment will pay off. And whether Premier can generate the growth it needs to build a brighter future after the challenges of the last couple of years remains to be seen.

The UK grabbed the industry headlines last week; there was fresh speculation over what the private-equity owners of United Biscuits could do with the snacks giant. Another UK manufacturer backed by private equity, R&R Ice Cream, was also in the spotlight, with rumours that it could be up for sale.

The future of United Biscuits has long been the subject of speculation. Its owners, Blackstone and PAI Partners, held talks with China's Bright Food over a potential sale in 2010 but that fell through. The buy-out houses now appear to be ready to sell off United Biscuits' savoury snacks business first (which could attract the likes of Kraft) and then perhaps offload the biscuits business at a later date.

R&R Ice Cream, the private-label ice cream manufacturer, with significant operations in the UK and Europe, could be a candidate for a secondary buy-out. There is unlikely to be a trade buyer for the company; the only other ice cream maker of scale is Unilever and a deal with the consumer goods giant would likely face competition concerns. However, R&R, under the ownership of Oaktree Capital Management and the direction of CEO James Lambert, has grown into a business with a robust presence in the ice cream markets of the UK, France and Germany and contracts with retailers including Tesco and licensing deals with the likes of Kraft and Nestle.

The headlines late last week were dominated by the announcement that Richard Brasher, the CEO of Tesco's UK operations, had decided to leave the retail giant. The decision of group CEO Philip Clarke to become more involved in Tesco's sluggish UK operations prompted Brasher's decision to quit, a move that surprised many in the industry, although, it seems, not everyone, including arch-rival Sainsbury's.

What next for Tesco? It is unlikely Clarke's renewed involvement in the UK will or can last for long; he has enough to do overseeing Tesco's business outside the UK and a permanent replacement for Brasher will soon be appointed.

Until next time...

Dean Best
Managing Editor
Web: http://www.just-food.com
Email: editor@just-food.com
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