Premium Brands Holdings, the Canadian speciality food group, struck an upbeat tone yesterday (13 March) as it reported fourth quarter earnings growth acceleration – a trend it anticipates to continue into 2015.
Fourth-quarter adjusted EBITDA rose 24.7% to C$19.2m (US$15m) as investments in efficiency and higher selling prices enabled it to more than offset C$1.3m in unusual asset write downs. For the full-year adjusted EBITDA rose 9.1% to C$76.1m.
Full-year revenue rose 15.7% to C$1.24bn. Sales gains were seen at both the food retail and foodservice businesses, with organic growth and acquisitions contributing to the top line.
“While we are pleased with our overall results, we see our fourth quarter performance, with sales and adjusted EBITDA increases of 16% and 24.7%, respectively, as more indicative of our future potential,” president and CEO George Paleologou commented. “Our results are now starting to reflect the benefits associated with a number of significant investments we have made in recent years in both our existing businesses and in acquiring new specialty food businesses.”
Paleologou said that the company is “excited” for 2015. “Our recent investments in plant capacity and efficiency improvements combined with raw material costs returning to normal levels will help to expand our margins and drive our continued sales growth. Furthermore, we are pursuing a number of exciting acquisition opportunities and I am very confident that we will be adding to our portfolio of great specialty food businesses in the near future,” he commented.
Canaccord Genuity analyst Derek Dley concurred with this assessment. “In our view, Premium Brands offer investors an attractive growth story, with margins set to expand following the completion of recent capital investments,” he wrote in a note to investors.