Investing.com -- Premier Foods (LON:PFD) reported a 4.6% rise in headline revenue for the first half of its financial year, reaching £498.7 million for the six months ending September 28.
Branded products continued to drive growth, with branded revenue up 6.8% to £444.7 million, led by popular names like Mr Kipling, Sharwood’s, and Ambrosia.
Grocery brands alone increased by 7%, while Sweet Treats like Mr Kipling cakes rose by 6.1%. In contrast, non-branded revenue declined by 10.4%, as consumers gravitated toward trusted brands, and the company exited several low-margin contracts.
Profitability also saw improvement, with headline trading profit climbing 5.5% to £70.2 million. Adjusted profit before tax was up 8.9% to £61.0 million.
“Profits were in line with our expectations with EPS ahead, the main reason being a lower than forecast tax charge. With guidance pointing to a full year outturn in line with expectations, we do not anticipate material change in our forecasts,” said analysts at RBC Capital Markets in a note.
However, statutory profit after tax dipped by 7.5% to £39.5 million, impacted by reduced pension credits compared to the previous year. Basic earnings per share declined to 4.6 pence, down from 5.0 pence.
Internationally, Premier Foods reported robust growth, with sales surging 31% as brands like Mr Kipling and Sharwood’s performed well across Australia, New Zealand, and North America.
Sharwood’s launched family-sized jars and introduced The Spice Tailor products to new markets, bolstering international revenue.
Premier Foods’ total net debt position improved significantly, falling to £221.3 million, a reduction of £51.8 million compared to the previous year, reflecting strong cash flow management and a strategic focus on debt reduction.
New launches like Sharwood’s curry kits, Mr Kipling Loaf Cakes, and Ambrosia Deluxe (NYSE:DLX) have tapped into consumer demand for quality, indulgent products at affordable prices.
“As inflation has begun to ease and shoppers are starting to feel more confident, we’ve seen consumers treat themselves more, helping sales of both Mr Kipling Signature Bites and Ambrosia Deluxe more than double in the first half of the year,” said Premier Foods’ chief executive, Alex Whitehouse.
Premier Foods remains optimistic for the second half of the fiscal year, citing planned seasonal promotions and holiday product releases, including festive Mr Kipling mince pies.
The company expects continued branded momentum, boosted by capital investments in efficiency and supply chain enhancements to support its growth model into the new year.