Blog: Dean BestPremier's results unappetising

Dean Best | 19 March 2012

On the face of it, this morning's 2011 financial results from Premier Foods, the UK's largest food manufacturer, make less than appetising reading.

Trading profit down 29%, sales falling year-on-year, and an operating loss of over GBP176m, compared to an operating profit of almost GBP220m in 2010. It was a year in which Premier saw significant change - businesses sold, a new CEO and a refocused business strategy - but it was also another challenging 12 months for the Hovis and Mr Kipling maker.

Premier and CEO Michael Clarke, the former Kraft Foods executive, are trying to look to the future with optimism. The company is focusing on eight so-called "power brands", is planning to continue to offload assets (Hartley's and Haywards are two brands said to be up for sale) and it has a new financing deal that has given it some breathing space.

"We intend to draw a line under the performance of 2011," Clarke said today. "Having put the financing and strategic building blocks in place, our immediate priorities are to implement this re-financing package, continue stabilising the business, re-focus the portfolio and invest in our future growth."

There is, however, some uncertainty around Premier's future. Some analysts are concerned that further disposals could reduce the company's ability to generate cash and mean its pension liabilities grow, relative to the size of the business that is left.

Premier plans to invest in marketing its eight flagship brands but, in this trading environment, it is by no means certain that that investment will pay off. And whether Premier can generate the growth it needs to build a brighter future after the challenges of the last couple of years.


Sainsbury's pulls the price lever

Sainsbury's, the UK's second-largest grocer, has set out plans for lower prices on a range of products, a move announced amid signs of pressure on its market share....


Intermarche broke rules with Nutella promo, French watchdog says

The pandemonium in stores of Intermarché as shoppers scrambled to grab jars of cut-price Nutella went viral - but the country's competition watchdog has announced the French retailer broke rules on se...


Big Food in investor spotlight this week at CAGNY

The senior management of a number of the major food manufacturers operating in the US will be in Florida this week for a key date on investor calendars....

Forgot your password?