UK: Premier shares plummet despite optimism
Shares in Premier Foods plc, the UK's largest food group, slid by more than 7% this morning (14 January) despite the company insisting it had made "good progress" in 2009.
In a trading update for the year ended 31 December, the Hovis maker said it expected to post full-year pre-tax profits to reach GBP165m (US$268m). Analyst expectations for pre-tax profits were reported to stand at GBP161-176m.
Premier will report its full-year figures next month and the company said it expects to announce a 3.5% rise in trading profit to GBP320m sales for 2009 and a 2.2% rise in sales to GBP2.6bn.
Premier forecast "encouraging" branded sales growth of 6.4%, reaching GBP1.7bn and leading to market share gains in its key categories.
Sales in the fourth quarter were up by 1.5% on 2008 with branded sales up 7%.
The company's grocery division made "good progress", with branded sales growth accelerating 5.3% to GBP1.15bn.
Sales were helped by strong growth of its top brands, particularly Ambrosia and Hartley's in desserts and Loyd Grossman and Homepride in cooking sauces.
The firm's Hovis division saw sales of branded bread rise by 13.3% to GBP370m, while sales of own-brand loaves plummeted 15.7% to GBP179m.
Sales in the firm's chilled division was driven by new contracts and the launch of branded products such as Loyd Grossman pizzas and Mr Kipling Christmas puddings. Sales reached GBP345m, a 4.1% increase on 2008.
Premier's shares stood at 34.75p at 12:51 GMT, down 7.1%.
The company will announce its results for the year to 31 December 2009 on 16 February.
Companies: Premier Foods plc
Premier Foods plc, the UK's largest food group, is aiming for its latest Loyd Grossman sauces product to be one of the country's top product launches this year....
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