Premier Foods plc (LON:PFD) has announced its preliminary results for the 52 weeks ended 29 March 2025.
Strong branded volume growth, Trading profit ahead of expectations and step up in dividend
| Headline results* (£m) | FY24/25 | FY23/24 | change |
| Headline Revenue1 | 1,147.8 | 1,108.7 | 3.5% |
| Headline branded Revenue1 | 1,008.1 | 958.1 | 5.2% |
| Headline Trading profit2 | 187.8 | 177.2 | 6.0% |
| Adjusted profit before taxation5 | 169.3 | 155.6 | 8.8% |
| Adjusted earnings per share8 (pence) | 14.5 | 13.5 | 7.3% |
| Net debt12 | 143.6 | 235.6 | £92.0m lower |
| Statutory measures (£m) | FY24/25 | FY23/24 | change |
| Revenue (includes Charnwood & Knighton prior to exits) | 1,149.0 | 1,137.5 | 1.0% |
| Profit before taxation | 161.3 | 151.4 | 6.5% |
| Profit after taxation | 124.9 | 112.5 | 11.0% |
| Basic earnings per share (pence) | 14.3 | 13.0 | 10.0% |
| Dividend per share (pence) | 2.8 | 1.728 | 62.0% |
Alternative performance measures above are defined below and reconciled to statutory measures throughout.
* Headline results presented for both periods exclude effect of Charnwood & Knighton site closures; Headline revenue is stated at constant currency
Statutory measures include Charnwood & Knighton results prior to closure
Strong financial performance
| · Branded revenue1 up 5.2% due to strong branded volume growth; total headline revenue1 up 3.5% |
| · Total Headline Grocery branded revenue1 up 4.6%, Sweet Treats branded revenue up 7.3% |
| · Market share14 gains in both volume, up 80bps and value, up 21bps |
| · Headline Trading profit ahead of expectations and up 6.0% versus prior year |
| · Adjusted profit before taxation up 8.8% at £169.3m |
| · Profit after taxation up 11.0%; basic earnings per share up 10.0% to 14.3 pence |
| · Net debt £92.0m lower than last year and Net debt/EBITDA reduced to 0.7x |
| · Agreed full pensions merger and removal of dividend match; on track to achieve full resolution by end of 2026 |
| · Dividend stepped up 62% to 2.8 pence, as previous match to pension scheme redeployed into dividend |
| Good progress on strategic priorities |
| · UK branded revenue1 up 4.4%; volume-led from consistent execution of branded growth model |
| · Capital investment increased by 26% to £41.4m, in line with strategy, driving efficiencies & capacity expansion |
| · New categories revenue up 46% with good progress across all initiatives |
| · International revenue up 23%9; double-digit revenue growth in all target regions |
| · The Spice Tailor and FUEL10K both delivered double-digit revenue growth |
Alex Whitehouse, Premier Foods Plc Chief Executive Officer “The business has delivered another strong year, with branded revenue growth up 5.2%, exceeding £1 billion, and driven by particularly good volumes which resulted in us taking further market share. With this strong branded performance, Trading profit grew 6% compared to last year, exceeding our previously raised expectations.”
“Our premiumisation strategy continues to be highly relevant, reflecting the trend for consumers to trade up and treat themselves to ranges such as our Ambrosia Deluxe and Mr Kipling Signature Bites, both of which delivered very strong revenue growth this year. Our Nissin noodles again achieved double-digit sales growth, taking yet more market share and benefitted from the addition of big pots and Demae Ramen to the range.”
“In addition to the strong financial performance, we have also made progress against all the pillars of our growth strategy; we significantly increased capital investment in our manufacturing sites this year, delivering improved efficiencies and providing the platform for future growth. Our revenue in new categories rose by 46%, led by Ambrosia porridge pots and we also grew our overseas businesses by 23%9. Additionally, and as we apply the benefits of our branded growth model, our acquired brands, The Spice Tailor and FUEL10K, both delivered double-digit sales growth this year and remain well-set for significant future growth.”
“We have now reduced our leverage to below 1x adjusted EBITDA4, reflecting the strong cash generating capacity of our business and the suspension of pension deficit contribution payments. We are one step further towards the full resolution of the pension scheme and with the removal of the dividend match we are stepping up our distribution to shareholders this year with a 62% increase in the dividend.”
“As we look ahead to the coming year, we expect revenue growth to be supported by a strong product innovation programme and our expectations for Trading profit growth are unchanged. In line with our capital allocation framework, we will continue to invest in projects to both increase efficiencies and automation and facilitate growth through product innovation and capacity while we also remain focused on pursuing M&A opportunities where we can add value to brands through the application of our branded growth model.”
| Dividend |
Subject to shareholder approval, the directors have proposed a final dividend of 2.8 pence per share in respect of the 52 weeks ended 29 March 2025 (FY23/24: 1.728p), payable on 25 July 2025 to shareholders on the register at the close of business on 27 June 2025. This represents a 62.0% increase in the dividend paid per share compared to FY23/24, is 54.7% ahead of adjusted earnings per share growth, and reflects redeployment of funds to shareholders following the removal of the dividend match to the Group’s pension scheme. The ex-dividend date is 26 June 2025.
| Outlook |
The Group expects revenue growth this year to be more equally balanced between volume and price/mix as it continues to leverage the strength of its Branded Growth Model. Additionally, it expects to deliver further progress against its strategic pillars this year, with expectations for Trading profit growth unchanged. In light of the Group’s balance sheet and strong cash generation, the Group expects to increase capital investment again this year in order to deliver attractive returns while also continuing to actively explore M&A opportunities.
| Enhanced capital allocation opportunities |
The Group is highly cash generative and benefits from strong EBITDA margins in line with the global branded food sector.
In March 2024, the Group announced the suspension of pension deficit contribution payments, which historically has consumed a significant proportion of cash. This frees up increased free cash flow and presents enhanced options for the Group to accelerate its growth ambitions. The Group’s priorities for capital allocation are unchanged and are summarised as follows:
| 1. | Capital investment: To increase efficiency and automation at our manufacturing sites and facilitate innovation driven growth through new plant line investment. |
| 2. | M&A: Continue to pursue branded assets which would benefit from the application of the Group’s branded growth model. We will maintain our financial discipline on M&A, applying a similar approach as to the recent acquisitions of The Spice Tailor and FUEL10K, with a focus on Return on Invested Capital. |
| 3. | Dividends: Expect to pay a progressive dividend, growing ahead of earnings, and have rebased the dividend following removal of the match to the pension scheme. |
The Group’s Net debt/EBITDA leverage target of 1.5x remains unchanged.
| Environmental, Social and Governance (ESG) |
Premier Foods’ ‘Enriching Life Plan’17, encompasses the three strategic pillars of Product, Planet and People, with good progress reported in FY24/25 against each of these pillars. In Product, revenue from products with a high nutritional standard18 increased by 9% in the year, aided by reformulation of our FUEL10K Granola products, meaning the FUEL10K breakfast cereal range is now non-HFSS (non-high in fat, salt and sugar). Products in the portfolio which are now classified as having a regulated health or nutrition benefit and are of a high nutritional standard18 is now 45%, an increase on last year. Further strong progress was again made in the Planet pillar, with a 10% reduction in Scope 1 and 2 carbon emissions, reflecting a range of efficiency and investment programmes and the adoption of renewable energy. Over the last three years, the Group has reduced Scope 1 and 2 carbon emissions by 30%. In the People pillar, the Group’s partnership with FareShare has facilitated the donation of over 1 million meals in a year for the first time, and increased 20% compared to last year. The proportion of women holding management grade roles is now 48%, up from 46.4% a year ago.
