December 4 2013 Latest news:
Thursday, October 31, 2013
Hovis, Mr Kipling and Bisto owner Premier Foods today revealed a hit to sales after the hot summer weather saw demand wane for its cooking sauces and soups.
Premier said sales growth of its frontline brands halved to 2% in the three months to the end of September from 4% in the first half after the heatwave put households off its Batchelors soups and Sharwood’s sauces.
Bread sales were also 1.5% lower after the hot weather, while group underlying sales overall sank 3.2% as its brands suffered generally amid a “highly competitive” market.
Gavin Darby, chief executive of Premier, said: “The intensity of promotional activity in our markets remains high while our categories were significantly impacted by the hotter weather in July and early August.”
The update came as a disappointment following a better-than-expected set of interim results in July which saw Premier raise its guidance for the full year, saying profits at a trading level should be around the top of City expectations, although the group said yesterday that it remained on track to meet the increased expectations.
Analysts at Panmure Gordon said the performance of Premier’s so-called support brands, such as Homepride and Angel Delight, were “particularly disappointing” as sales dived by 9.8%, twice the level of decline seen in the first half.
The group plans to turn around the fortunes of these brands next year, with increased investment and by targeting sales through discount retailers on the high street.
Premier is now focusing mainly on eight “power” brands − Ambrosia, Batchelors, Bisto, Hovis, Loyd Grossman, Mr Kipling, Oxo and Sharewood’s.
It has been undergoing a major reoganisation to reduce debts and improve profits, including an overhaul of its bread business which involves the closure of a Hovis depot at Mendlesham, near Stowmarket, with the loss of 45 jobs.
Premier also called time on production at its 109-year-old flour mill at Barry Docks in South Wales earlier this month as part of a shake-up of its Rank Hovis milling business.
The group’s debt reduction strategy has included the sale of a number of businesses, including its Branston and Haywards pickles businesses based in Bury St Edmunds which were acquired in two separate deals last year by the Japanese group Mizkan.