Premier brands continue to perform

PREMIER Foods today announced that its branded goods had continued to grow volumes and gain market share, despite the tough economic climate.

The company, which is famous for brands such as Branston Pickle, Batchelor’s soups, Bisto and Hovis, manufactures its Quorn brand in North Yorkshire.

In an interim management statement today, Premier reported that its net debt is expected to fall by £100m year on year in the first half of its financial year.

The group said that its “drive brands” sales – products that it is focusing on growing such as Hovis and Mr Kipling cakes – were up 3.4% in the three months ended March 31, total branded sales value was down 0.3% and total branded volumes were up 2.2%. Non-branded sales were down 12.9% and total group sales were down 5.1%.

Chief executive Robert Schofield said: “We are pleased that our brands have continued to gain volume market share with volumes of our drive brands up 6.6%. Trading conditions, however, remain challenging with promotional activity across the market continuing at elevated levels.

“Non-branded sales were lower primarily due to promotional activity by brands, the effect of contract exits in 2009 and flour deflation. We expect an improving trend for non-branded sales through the year as contract exits and flour deflation drop out of the comparatives and recent contract wins come into effect.”

He added: “We are progressing well on our strategic cost reduction targets of delivering procurement savings and improving manufacturing efficiency. We reiterate our guidance of earlier this year that, assuming no adverse change in the consumer and trading environment, we expect the benefits of our strategy to result in further progress in 2010.”