• Sales fall 1.6%
  • Market share flat
  • FY outlook, including debt reduction, confirmed

Premier Foods plc attributed a decline in first-quarter sales to the timing of Easter and insisted its market share remained "broadly flat" over the period.

The UK company said group sales were down 1.6% in the three months to 4 July, dropping to GBP166.2m (US$259.2m). Branded sales decreased 1.4% in the quarter.

However, Premier said – when adjusted for the timing of Easter – sales would have been on a par with last year's levels. The UK food maker said grocery brands demonstrated "encouraging" volume trends while sweet treats delivered volume increases on the back of recent brand investments.

CEO Gavin Darby said: "We are encouraged by the continued good volume and value response of our brands in those areas where we have focused our investment, although branded sales in the quarter were impacted by the earlier timing of Easter."

The company said it will increase investment in its brands this year, with marketing to increase "materially" year-on-year. Product launches will include: Oxo stock pots; Lloyd Grossman and Sharwood's melts; and Cadbury cakes, produced under licence.

Looking to the full year, Darby said expectations remained unchanged, including "a significant reduction" in net debt. The company does, however, expect the business environment to remain "challenging".

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Shore Capital analyst Clive Black said: "We expect the run-up to Christmas 2015 to be a good one for grocery shoppers in the UK. We believe that they will see a further step-up in the self-help initiatives of the British superstore groups, embracing additional pricing activity still alongside range and category reviews. Within these contexts we believe that Premier is reasonably soundly positioned boosted by the creeping growth in NPD and marketing activity. The input environment remains reasonably benign and whilst comparatives toughen, self-help initiatives should increasingly kick-in to our minds."