Premier Foods makes ‘substantial progress’ with jump in revenue, profits

Premier Foods has reported strong revenue and profits growth, riding on the back of increased marketing investment.

Group revenue rose by 2.8 per cent to £847.1 million and trading profit increased 3.2 per cent to £132.6 million for the 52 weeks ended on 28 March 2020, the company's annual results show.

The firm has also reversed prior year losses in statutory pre-tax profit (£53.6 million) profit after tax (£46.5 million). It has beaten its net debt/EBITDA ratio target of 3.0x, after reducing net debt by £62 million and lowering the ratio to 2.7x as a result.

“This has been a period of considerable progress for the company,” commented Alex Whitehouse, chief executive.

“We have now grown group revenues, trading profit and adjusted earnings for each of the last three years, driven by our successful branded growth model of delivering insightful new product innovation together with emotionally engaging advertising and building strategic retailer partnerships.”

Revenue growth in the UK went up by 4.3 per cent in 2019-20, and the 7.3 percent the last quarter of the year, marking 11 consecutive quarters of growth.

The firm attributed the success to significantly increased consumer marketing investment, adding that it will be increasing the spend further in the current fiscal.

Whitehouse said the firm expects year-on-year revenue growth for the first quarter of 2020-21, which has seen the impact of COVID-19 pandemic, to be approximately 20 per cent, reflecting continued strong demand, particularly in the grocery business.

“Consequently, we expect to exceed current expectations for FY20/21 revenue and trading profit despite incurring some additional operating costs in our supply chain,” he said.

Whitehouse has added that the lockdown has led to “particularly high levels of demand” for items relating to meal preparation, including cooking sauces, gravy and baking ingredients.