Premier profits on remain on track

HOVIS bread and Branston pickle maker Premier Foods said yesterday it remained on track to meet profit forecasts for 2007. In a closing statement, ahead of annual results due on March 4, Premier said it had recovered a “large proportion” of raw material price increases during the year through pricing and cost savings.

HOVIS bread and Branston pickle maker Premier Foods said yesterday it remained on track to meet profit forecasts for 2007.

In a closing statement, ahead of annual results due on March 4, Premier said it had recovered a “large proportion” of raw material price increases during the year through pricing and cost savings.

Sales during the second half of the year were up 3% on a “pro forma” basis (taking into account the effect of recent acquisitions) and would result in full-year pro forma sales growth of 1.4%, the group said.

“As we have previously indicated, we have experience significant cost pressures across the business this year, particularly wheat,” said the group.


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“Despite these cost pressures and reduced branded bread volumes we anticipate full year trading profit will be still within the range of market expectations.”

Premier, which also includes brands such as Mr Kipling cakes, Hartley's jams and Bisto gravy, added that Christmas trading has been “satisfactory” across the group and that retail price rises, including increases in break in September and October, left the business well positioned going into the new year.

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Robert Schofield, chief executive, said: “After a slow first half, we have seen sales growth improve during the second half, although this has been held back by the decline in retailer branded sales in the core Premier business.

“We mentioned earlier in the year that we foresaw considerable raw material and packaging inflation led by wheat but also affecting dairy, fruits and vegetables in particular.

“Whilst these additional costs have had an impact in the second half of 2007, we have now recovered a large proportion of these cost increases through pricing and cost savings, which should provide a solid platform for the development of the business in 2008.”

He added: “We are delighted by the progress we have made in the transformation of Premier in 2007. The integration of the Campbell's business was complted in March 2007 and the integration of the RHM culinary brands division was completed in October 2007.”

Premier is also rationalising its manufacturing operation, with two factories having closed last year and seven more planned for 2008-09.

However, its sites at Bury St Edmunds and Histon, near Cambridge, are among those earmarked for investment.

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