Sales rise at Premier Foods
HOVIS to Branston maker Premier Foods today said its brands were trading well in tough conditions with sales up 0.5% in value and up 3.5% in volume for the half-year.
The group, which employs 700 in the North West and recently closed a distribution depot in Wigan, said total sales for the period to June 30 were down 4.5% on a pro forma basis for the six months owing to own label sales which were down 12.7%. Non-branded market volumes were down 5.9%.
Gross profit margin increased which Premier said reflected its product mix, procurement gains and manufacturing efficiencies.
Operating expenses were down 1.6% despite higher pension, marketing and restructuring costs. Trading profit was down £7m to £110m reflecting, as previously indicated, £11m of additional pension, marketing and restructuring costs.
Operating profit was up £40m to £67m following the completion of exceptional integration expenditure in 2009. Loss after tax increased by £17m to £40m reflecting higher mark to market losses on swap contracts, the company said. The group had net debt of £1.36bn at June 26, down £110m year on year.
Chief executive Robert Schofield, said: “These results reflect the actions we are taking in line with our trading strategy. Our principal brands are growing in both volume and market share and our gross margins have risen as we have improved product mix and delivered procurement gains and manufacturing efficiencies.
“We are controlling costs tightly and have made good progress in strengthening our cash flow and reducing debt. Today we are setting out further details of our programme to diversify and strengthen our financial structure. With the foundations of the strategy in place and delivery on track, we are looking forward to the rest of the year with enthusiasm.”
