Blog: Dean BestPremier's latest sale cheers City

Dean Best | 30 October 2012

Premier Foods' latest deal to dispose of a household brand - this time Branston pickle - sent the UK firm's shares soaring today (30 October).

The company announced a GBP93m (US$149.5m) deal with Japanese food group Mizkan - to which it had sold another set of assets, including the Haywards pickled onion brand, earlier this year.

The transaction, which Premier expects to finalise early next year, is the latest the company has completed in the last 18 months or more as it lowers its debt pile and focuses on a select group of brands.

Premier CEO Michael Clarke said the sale would mean it exceeds its target of bringing in GBP330m in proceeds from disposals 20 months before a June 2014 deadline it signed up to under its financing agreements.

Shares in the company, which owns brands including Batchelors soup and Oxo gravy, jumped after the news and were up 6.65% at 108.25p.

Panmure Gordon analyst Graham Jones took a considered view of the sale and of Premier's financial position.

Jones said the deal was worth 1.4x Branston's sales and represented a 7.9x EV/EBITDA multiple for 2011, which, he said, was a "reasonable price" and a "better multiple than previous disposals".

However, he added: "Even after these recent disposals, Premier will remain highly geared and it still has a very large pension deficit which has to be serviced from a smaller cash generative base. For now we stick with our 'hold' recommendation and 90p price target."


BLOG

UK food associations come together on Brexit

The plethora of food manufacturing associations in the UK has been argued by some to be an impediment to the industry coming to a coherent position on the aftermath of Brexit and on what the sector sh...

BLOG

Amazon cools talk of plans for wave of grocery stores

An update on Amazon's plans for the grocery sector. The usually reticent retailer has this week poured cold water on claims it has plans for 2,000 physical grocery stores....

BLOG

Will Amazon Go be retail "game-changer"?

Ask any FMCG executive to list the trends shaking up the sector and digital and e-commerce will be pretty high on the list. Drill down into that and Amazon will be one of the subjects in the digital s...

BLOG

UK food producers call for "best possible single market access" post-Brexit

Since Theresa May took over as UK Prime Minister in the wake of the country's referendum vote to quit the European Union, she and her ministers have been at pains not to divulge their negotiating posi...

just-food homepage



Forgot your password?