Share prices in Premier Foods plc fell today as the UK group announced a 6% drop in sales for the first quarter due to a “subdued” trading environment and the impact of the later Easter.

For the period ending 31 March, the Mr Kipling cakes and Bisto gravy owner reported sales fell 6.2% to GBP186.3m (US$312m).

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CEO Gavin Darby said: “As expected, we had a softer first quarter due to the subdued grocery retail environment, a later Easter and the impact of milder weather.”

However, Darby said Premier’s expectations for the full year are unchanged. “While trading conditions are expected to remain challenging for the remainder of the year, we have a strong programme of new product launches and consumer marketing planned for the second half of the year building on our enhanced customer partnerships with retailers and supported by continuing initiatives to reduce costs, complexity and improve efficiency.”

Panmure Gordon analysts Graham Jones and Damian McNeela said Premier had “clearly flagged a weak start to the year”. However, the analysts said they had expected a better performance from Premier’s brands.

“A decline in power brands sales of 3.5% and branded sales down 5.4% was still slightly weaker than we had expected,” they wrote in a note to clients.

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However, they added: “Management appears confident that the full-year objective of 2-3% power brand sales growth is still a realistic objective, and costs appear to be well under control. As such we are not changing our forecasts for the year, and see value in the shares, although it probably requires confirmation of more positive trading to see the shares regain lost ground.”

Shares in Premier were down 4.33% at 60.75p at 14:51 BST.

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