• Premier revises deadline for cost cuts
  • Underlying sales, profits up
Premier provided "underlying business" results to highlight "core" business

Premier provided "underlying business" results to highlight "core" business

Success in cutting costs quicker than expected, as well as an increase in underlying half-year sales and profits, helped drive Premier Foods plc's shares this morning (7 August).

The UK food group said it now expects to cut costs by GBP40m (US$62.5m) by the end of this year, ahead of its initial 2013 target.

The news on costs cheered the City. Premier, which has been pressured by debt in recent years, is looking to turn around the business by cutting costs and focusing on eight "power brands".

The Sharwood's sauces owner reported a 3.2% gain in first-half trading profit. Sales from its underlying business increased 1.1% as higher grocery sales offset a fall in revenues from bread.

Premier said its underlying business excludes results from assets sold by the end of June, sales from its milling arm and charges. Sales of its power brands were up 2%.

On a reported basis, sales fell 15.1% and operating profit dropped 40.7%. Premier's first-half net loss was GBP40.2m. Last year, Premier booked a net loss of GBP339m but has restated last year's net loss to GBP11.7m to reflect its own-label chilled business as a discontinued operation.

Shares in Premier were up 3.79% at 75.25p at 09:49 this morning. Premier's shares are up over 29% since the start of the year. The highest level the shares have reached this year is 180p.

Click here to read CEO Michael Clarke's thoughts on the results.

Show the press release

 

7 August 2012

Premier Foods plc

Half Year results for the six months to 30 June 2012

Delivering stabilisation and growth strategies on track

Underlying sales, excluding Milling, up 1.1% 

Power Brand sales up 2.0%, Grocery Power Brand sales up 4.9%

Underlying Trading profit up 3.2%

Marketing investment increased 40%

Power Brand portfolio consistently gaining market share

Cost reduction programme to deliver £40m savings by year end, ahead of 2013 plan

Disposal programme on schedule

Full year outlook unchanged

Premier Foods today announces its Half Year results for 2012, confirming the Group’s stabilisation plans and growth strategies remain on track.

Commenting on the Half Year, Michael Clarke, Chief Executive Officer, said:

“I’m pleased with the progress we are making to stabilise the business, re-focus the portfolio and invest in our future growth. Our strategy of focusing on our Power Brands is starting to gain traction. Power Brand sales were up 2% and sales of Grocery Power Brands increased by a healthy 4.9%, reflecting consistent improvement in market shares. Trading profit increased 3.2%, in line with our expectations.

Plans to simplify the business and drive further efficiency and effectiveness are proceeding ahead of plan and we will now deliver the previously announced £40 million savings by the end of 2012. As we continue our divestment programme, we plan to take further costs out of the business. 

We remain cautious given the current economic and trading environment and our full year expectations remain unchanged.”

Click here for the full release.

 

Original source: Premier Foods plc