UK manufacturer Premier Foods plc today (31 October) reported a 3% drop in third-quarter sales as “power brands” growth slowed and revenue from smaller brands, bread and own label fell.
Sales, excluding its milling business, recent disposals and a bread contract that ended in April, were down 3.2% to GBP283.2m in the three months to 30 September.
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The fall meant Premier’s sales for the first nine months of the year were down 1.6% at GBP904.4m. However, the company said: “Expectations for the full year remain unchanged.”
Shares in Premier were down almost 11% at the time of writing, suggesting investors were profit taking after the recent rally in the company’s shares.
Premier’s power brands, including Ambrosia and Bisto, saw sales inch up 0.4% in the third quarter. The hot summer in the UK affected a number of the categories in which Premier operates. For the nine months to the end of September, power brand sales were up 2.3% at GBP626m.
During the third quarter, sales of what Premier’s calls “support brands”, including Homepride sauces, slid 9.8% to GBP45.6m. The company said this part of the portfolio would improve next year on the back of increased distribution, including in the discount channel.
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By GlobalDataOwn-label sales were down 11.4% as Premier exited a number of contracts. Private label now accounts for 10% of Premier’s grocery sales.
Premier’s bread division saw sales dip 1.5%, again affected by the hot weather.
The company, meanwhile, announced a deal to distribute Ambrosia rice pudding pots in China.
Shares in Premier were down 10.97% at 160.25p at 10:24 GMT. Premier’s share price is up over 42% so far this year.
