Premier Foods make a strong start the financial year

Premier Foods

Premier Foods plc (LON:PFD) have today provided its Quarter 1 trading update for the thirteen weeks ended 2 July 2022

·   Q1 Group sales up 6.0% versus prior year, Branded sales up 4.2%
·   Continued market share2,3 gains both instore and online
·   International sales up 12%4
·   Firmly on track to deliver FY22/23 expectations

Alex Whitehouse, Chief Executive Officer

“We’ve made a strong start to this financial year, growing sales by 6% in the quarter and again increasing market share both instore and online, as we continue to apply the elements of our branded growth model. Our recently launched new products include a healthier range of Mr Kipling Deliciously Good cakes and authentic East Asian Sharwood’s cooking sauces while Mr Kipling benefitted from a new TV advertising campaign in the quarter. Sales overseas increased by 12% due to a particularly strong cake performance in Australia, where Mr Kipling delivered its highest ever market share.”

“We have made good progress in recovering our input cost inflation through a range of measures, including cost efficiencies and pricing, and we continue to monitor the situation closely. Consumers are increasingly looking to cook tasty affordable meals at home; this fits well with our broad portfolio of brands and was illustrated by the strong performance of Batchelors and Nissin in the quarter. With this positive trading momentum behind us, we remain firmly on track to deliver our expectations for the year.”


Trading update

Grocery

Grocery sales increased by 6.3% in the quarter, with branded sales 4.5% ahead of the prior year. Batchelors and Nissin performed particularly well, with good value meal solutions proving increasingly popular as household budgets become ever stretched. All brands benefitted from price recovery in the quarter, volumes were slightly lower, in part due to tougher comparatives reflecting pandemic restrictions in the prior year. Non-branded growth of 17.1% was due to strong recovery in out of home sales compared to the prior year and pricing benefit in retailer branded product categories.

Sweet Treats

Sales in Sweet Treats increased by 5.1%, with branded sales up 3.3% and non-branded sales 26.8% higher than last year. Cadbury cake enjoyed a strong quarter, demonstrating resilient volumes and Mr Kipling sales were higher despite timing changes to promotional activity. The healthier range of non-HFSS5 Mr Kipling Deliciously Good cakes were launched in the period and has been very well received by consumers. Non branded sales growth was due to contract gains in pies and tarts and pricing benefits.

International

The overseas business continued its positive momentum, with sales up 12%4 compared to last year. Australia delivered a very strong performance, with Mr Kipling recording its highest ever market share. In Canada and Europe, Sharwood’s has successfully increased distribution in major national retailers, with benefits expected to build through the year, while in Ireland, sales of Nissin noodles delivered strong growth as we have seen in the UK.

Outlook

Trading so far this year has been in line with the Board’s expectations, with the Group delivering strong sales growth and further market share gains. As expected, good progress has been made in recovering industry wide input cost inflation through a range of measures, including cost efficiency and pricing action and the Group continues to monitor the situation closely. The Group’s expectations for FY22/23 remain unchanged and in the medium term, it expects to continue to realise further shareholder value through the ongoing delivery of its five pillar growth strategy.

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