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

Serious Fraud Office launches Tesco probe

The UK's Serious Fraud Office has launched an investigation into the GBP263m (US$424.6m) black hole in Tesco's accounts, the retailer confirmed today (29 October)....

BLOG

US food industry takes aim at new nutrition app

A mobile app that claims to be the "most comprehensive food-rating database available" to US consumers has raised the hackles of the country's food manufacturers....

BLOG

Auchan strikes another purchasing deal with retail rival

Just weeks after announcing a purchasing tie-up in France with local rival Systeme U, Auchan has outlined an international agreement with Germany's Metro Group....

BLOG

Tesco profits plunge, chairman departs

Tesco has reported a massive 92% drop in first half profits as the accounting fiasco continues to widen....

just-food homepage



Forgot your password?