UK: Premier details refinancing plan, books 2013 profit fall
Premier reported higher sales from its core brands in 2013
Premier Foods plc today (4 March) detailed how it plans to recapitalise its balance sheet as it booked a drop in full-year sales and profits this morning.
The UK group said it will issue GBP353m (US$588.7m) in new shares to raise capital. The Ambrosia custard and Bisto gravy maker is also set to issue bonds it says will raise proceeds of GBP475m. The company said it had also secured a GBP300m revolving credit facility.
The capital injection will allow Premier to tackle its high debt levels. Premier ended 2012 with net debt of around GBP890m and a pension deficit totalling GBP394.7m. Over the past year, the company said initiatives to reduce "complexity" and a "disciplined approach" to its cost base allowed it to cut debt by GBP120m.
Cheif executive Gavin Darby said: "This new capital structure will liberate Premier Foods from its past and provides a great platform on which to execute our category based strategy."
The company moved to "simplify" its structure by forming a joint venture company for its Hovis bread business with private-equity firm Gores Group earlier this year. In 2012, Premier sold off a clutch of non-core brands such as Branston pickle and Hartley's jam.
Premier has targeted greater sales of its higher-margin "grocery power brands", which include Lloyd Grossman sauces, Bisto gravy and Mr Kipling cakes.
The group saw sales of these key brands rise 2% in 2013, climbing to GBP543.5m. However, total underlying sales - excluding the milling business - were down 1.1% in the year, falling to GBP1.28bn. Sales from continuing operations, excluding the impact of disposals, fell 20.1%, Premier added.
Operating profit fell to GBP52.6m, down from GBP83.7m in 2012. The group racked up a net loss of GBP245.9m, up from a loss of GBP17.9m in 2012. The net loss was deepened by higher losses from discontinued operations, which rose to GBP199.2m.
Trading operating profit from continuing operations was also down - dipping 12.3% to GBP135.9m in 2013. However, the company emphasised it saw a strong increase in underlying operating profit, which rose 17.7% year-on-year to GBP145.2m.
Click here for the full release for Premier or check back for further coverage from the group's conference call with management.
Companies: Premier Foods plc
MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organi...
Premier Foods plc (Premier Foods) is the largest food manufacturers in the UK. It manufacturers and supplies branded and non-branded food products to retail, wholesale, and food services markets. The ...
Breakfast Cereals in France industry profile provides top-line qualitative and quantitative summary information including: market size (value 2009-13, and forecast to 2018). The profile also contains ...
- USDA's GMO move may block mandatory labels
- Premier Foods to push on with range revamp
- Why FMCG background key for next Thorntons CEO
- just-food's pick: Products on show at SIAL China
- Focus: Why Dairy Crest needs to offload dairies
- Unilever CFO Jean-Marc Huet stands down
- Kerry adds to Mattessons' adult snacking range
- Premier Foods sees FY profits fall
- Mars launches "healthy" snacks Goodnessknows
- Mondelez to cut jobs at Chicago site
- ALDI 2015: Radically transforming Anglo Saxon grocery markets
- Pizza Delivery & Takeaway in the UK - Industry Market Research Report
- Mars Inc in Packaged Food (World)
- Chocolate Flavors Market by Application & Region - Global Trends & Forecast to 2019
- Global Database of the Top 1000 Chocolate and Confectionery Producers - Company Names, Financial Performance, and Contact Details