Premier Foods, the UK’s largest food maker, today (13 January) posted a 9% jump in full-year sales and issued a confident outlook for fiscal 2009.
In a trading update for the year ending 31 December, Premier said that sales gained momentum during the fiscal year, increasing 10% in the second half.
It added that sales of its Hovis brand, which saw significant investment during the year, are expected to increase by 13% year-on-year, while growth at its grocery division was weighted towards the second half, when sales gained 11%.
The maker of Mr Kipling cakes and Bisto gravy said that it expects its full-year adjusted profit before tax to be between GBP185m (US$269.9m) and GBP190m.
Looking to 2009, Premier CEO Robert Schofield said: “The significant momentum we have generated in the second half of 2008 in both our Grocery and Hovis divisions and the enhanced efficiency of our manufacturing base give us confidence that Premier is well positioned to meet the challenges of the current economic downturn.”
Premier, whose shares have lost almost 90% of their value over the past year on concerns over its ability to repay GBP1.8bn of debt, said that its planned capital restructuring was ongoing and revealed that it was in talks to sell two of its businesses to raise cash.
Premier said that it has received a GBP38m offer from French bakery group Nutrixo for its Le Pain Croustillant and Sofrapain businesses.
“LPC and Sofrapain are well positioned businesses but require significant capital expenditure to maintain their positions in the UK and French market places,” Premier said.
The terms of the offer are acceptable in principle, Premier said, and consultations with employees and their representatives about the proposed transaction have begun.
Premier added that it is also in discussions about a possible sale of its Martine Spécialités business, although no firm offer has yet been received.
The group confirmed it has made progress in its debt reduction plans and will provide a further update with its preliminary results.
“As part of the constructive discussions with our lending banks, following the expiry of the GBP125m working capital facility put in place in March 2008, we have arranged a GBP60m working capital facility to provide additional working capital headroom over the first quarter of 2009,” Premier reported.
The news comes hot on the heels of fresh speculation that the food producer is close to sealing a deal that would see Premier issue new equity and offer as much as 40% of its enlarged share base to private equity investors.