Blog: Life not a cakewalk for Premier
Dean Best | 19 November 2008
The fact that Premier Foods could afford to turn down an offer for Mr Kipling, one of UK grocery's household names, suggests that the company's financial problems aren't as bleak as some have suggested.
However, life is hardly a cakewalk for the UK's largest food manufacturer at the the moment.
Premier has won some breathing room from its lenders with the news that a key covenant test has been pushed back from December to March.
However, the company has been forced to scrap plans for an interim dividend to reduce the pressure on its debt levels, which stand at around GBP1.8bn.
Also, any plans that Premier has to sell off non-core assets are being hit by the turmoil in the financial markets.
Nevertheless, Premier insists the business is robust and is trying to clam nerves overt the its financial health. It claims it would have passed that covenant test if it had been held next month, while it points to an 8% rise in sales for its fiscal year so far. Profits, the company says, are in line with expectations as cost-savings from the groups' programme to rationalise its manufacturing base flow through the business.
However, uncertainty surrounds Premier at the moment., Shares in the company were down over 5% to 26.5p at 15:41 GMT this afternoon (19 November). The road to recovery, it seems, will be a long one.
A year after union officials alleged Fyffes abused workers on plantations in Central America - and called on the produce giant to be kicked out of the Ethical Trading Initiative forum - the company is...
Much of the chatter about where 3G Capital could look next has centred on packaged food - but might the private-equity fund be about to extend its foodservice empire?...
Headlines that Mead Johnson's board has backed Reckitt Benckiser's takeover bid will no doubt overshadow the other news on the group this week – that it is facing a US lawsuit from a “whistle blower” ...
Kantar Worldpanel issued its monthly supermarket share data in the UK this morning - and the numbers showed a change in the identity of the country's top five food retailers....
- Focus: Nestle CEO plan to balance sales, earnings
- Does Kraft Heinz want to swallow Unilever whole?
- Will Kellogg's DSD exit help it grow in US snacks?
- Comment: Meal kits in US - don't believe the hype
- Is Mondelez's margin target hurting sales?
- Nestle plans restructuring as 2016 profit misses
- Kraft Heinz pursuing Unilever in takeover move
- Danone eyes efficiency, agility with new structure
- Kraft Heinz returns to organic growth, ups margins
- Danone sales dampened by Europe, China