Premier Foods, the UK food group, has revealed it plans to sell its Ambrosia custard brand.
In a statement this morning (13 November) accompanying the company’s release of its half-year results, the company’s CEO, Gavin Darby, said the company – which makes Mr Kipling cakes and Oxo stock cubes – wants to raise funds to invest and also to reduce its debts.
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“While we are committed to our strategy of improving operating performance and targeting a net debt-to-EBITDA ratio below three times by March 2020, we are also working in parallel to identify other strategic opportunities to accelerate the company’s turnaround,” he said
“The board has determined that it should focus resources on areas of the business which have the best potential for growth through accelerated investment in consumer marketing and high return capital projects. Accordingly, we are pursuing options to fund these plans as well as delivering a meaningful reduction in net debt, through discussions with third parties regarding the potential disposal of our Ambrosia brand.
“Although there is no certainty that any transaction will complete, we will update shareholders in due course.”
Darby, who also today announced his intention to stand down as CEO in January, said the company has a “strong innovation plan” in place for the second half of the year,
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By GlobalDataPremier spent much of the summer locked in a war of words with Hong Kong-based activist investor Oasis Management, which was critical of the company’s performance under Darby and wanted to unseat him as CEO.
Darby eventually beat off that challenge and was re-elected at the company’s annual general meeting on 18 July.
But, partly as a result of activist investor pressure, Premier instigated a strategic review and in July said it may look to offload assets.
