Premium Brands upbeat on 2015 outlook

Premium Brands upbeat on 2015 outlook

Premium Brands Holdings, the Canadian speciality food group, struck an upbeat tone yesterday (13 March) as it reported fourth quarter earnings growth acceleration – a trend it anticipates to continue into 2015. 

Fourth-quarter adjusted EBITDA rose 24.7% to C$19.2m (US$15m) as investments in efficiency and higher selling prices enabled it to more than offset C$1.3m in unusual asset write downs. For the full-year adjusted EBITDA rose 9.1% to C$76.1m. 

Full-year revenue rose 15.7% to C$1.24bn. Sales gains were seen at both the food retail and foodservice businesses, with organic growth and acquisitions contributing to the top line. 

"While we are pleased with our overall results, we see our fourth quarter performance, with sales and adjusted EBITDA increases of 16% and 24.7%, respectively, as more indicative of our future potential," president and CEO George Paleologou commented. "Our results are now starting to reflect the benefits associated with a number of significant investments we have made in recent years in both our existing businesses and in acquiring new specialty food businesses."

Paleologou said that the company is "excited" for 2015. "Our recent investments in plant capacity and efficiency improvements combined with raw material costs returning to normal levels will help to expand our margins and drive our continued sales growth. Furthermore, we are pursuing a number of exciting acquisition opportunities and I am very confident that we will be adding to our portfolio of great specialty food businesses in the near future," he commented. 

Canaccord Genuity analyst Derek Dley concurred with this assessment. "In our view, Premium Brands offer investors an attractive growth story, with margins set to expand following the completion of recent capital investments," he wrote in a note to investors. 

Show the press release

Premium Brands Holdings Corporation Announces Fourth Quarter 2014 Results and Increase in Dividend

VANCOUVER, BC--(Marketwired - March 12, 2015) - Premium Brands Holdings Corporation (TSX: PBH), a leading producer, marketer and distributor of branded specialty food products, announced today its results for the fourth quarter of 2014.

HIGHLIGHTS FOR THE QUARTER

  • Revenue for the quarter increased by 16.0% to a record $322.1 million as compared to $277.7 million for the fourth quarter of 2013. For the year, revenue increased by $168.9 million or 15.7% to 1.24 billion.

  • Record fourth quarter adjusted EBITDA of $19.2 million despite $1.3 million in unusual asset write-downs. Adjusted EBITDA for the fourth quarter of 2013 was $15.4 million. For the year, adjusted EBITDA increased by $6.4 million or 9.1% to $76.1 million.

  • Adjusted earnings for the quarter of $4.5 million or $0.20 per share as compared to $2.8 million or $0.13 per share for the fourth quarter of 2013. For the year, adjusted earnings were $20.2 million or $0.92 per share as compared to $20.1 million or $0.95 per share for 2013.

  • Fourth quarter declared dividend of $0.3125 per share. Declared dividends for the year totaled $1.25 per share.

  • Rolling four quarters free cash flow of $57.4 million resulting in a dividend to free cash flow ratio of 48.4%.

  • Completed the acquisition of Ocean Miracle Seafood for $3.4 million plus contingent consideration of up to $3.0 million. Ocean Miracle Seafood is a distributor of live, fresh and frozen seafood to restaurants and specialty retailers in the Greater Toronto Area.

The Company also announced that it will be increasing its quarterly dividend by 10.4% to $0.345 per share ($1.38 per share annually) from $0.3125 per share ($1.25 per share annually). The increase will commence for the dividend period ended March 31, 2015 with the first dividend under the new rate being payable on April 15, 2015. Unless indicated otherwise in writing at or before the time the dividend is paid, each dividend paid by the Company in 2015 or a subsequent year is an eligible dividend for the purposes of the Enhanced Dividend Tax Credit System.

SUMMARY FINANCIAL INFORMATION

(In thousands of dollars except per share amounts and ratios)

13 weeks

13 weeks

52 Weeks

52 Weeks

Ended

Ended

Ended

Ended

Dec 27,

Dec 28,

Dec 27,

Dec 28,

2014

2013

2014

2013

Revenue

322,092

277,672

1,241,656

1,072,737

Adjusted EBITDA

19,203

15,350

76,093

69,739

Earnings

1,131

870

11,392

12,539

EPS

0.05

0.04

0.52

0.60

Adjusted earnings

4,507

2,839

20,221

20,103

Adjusted EPS

0.20

0.13

0.92

0.95

  Rolling Four Quarters Ended

Dec 27,

Dec 28,

2014

2013

Free cash flow

57,374

49,247

Declared dividends

27,768

26,498

Declared dividend per share

1.2500

1.2315

Payout ratio

48.4%

53.8%

"During 2014 we continued to make solid progress towards our goal of becoming one of North America's leading specialty foods companies," said Mr. George Paleologou, Present and CEO. "In fact, our sales growth for the year of $168.9 million exceeded what our total specialty food sales were when we began implementing our current business strategies in 2001," added Mr. Paleologou.

"2014 was, however, a very challenging year with the cost of many of the raw materials used in our operations reaching record highs. And while we are pleased with our overall results, we see our fourth quarter performance, with sales and adjusted EBITDA increases of 16.0% and 24.7%, respectively, as more indicative of our future potential. Our results are now starting to reflect the benefits associated with a number of significant investments we have made in recent years in both our existing businesses and in acquiring new specialty food businesses.

"In terms of the ramp up of our new 180,000 square foot sandwich facility in Columbus, OH, we have made significant progress over the last month and are pleased to report that we now expect this project to start being accretive to our earnings in the second quarter of 2015.

"Looking forward, we are very excited about what lies ahead for 2015. Our recent investments in plant capacity and efficiency improvements combined with raw material costs returning to normal levels will help to expand our margins and drive our continued sales growth. Furthermore, we are pursuing a number of exciting acquisition opportunities and I am very confident that we will be adding to our portfolio of great specialty food businesses in the near future.

"Consistent with our outlook for 2015 and our objective of maintaining a payout ratio of approximately 50%, we are pleased to be announcing a 10.4% increase in our quarterly dividend to $0.345 per share per quarter or $1.38 per share per year," said Mr. Paleologou.

Original source: Premium Brands Holding Corp.