Mr Kipling owner Premier Foods increases profit
Shares in Mr Kipling owner Premier Foods soared this morning after the company reported an increase in profit and revenue in the first half of the year.
Premier Foods’ stock was up 8.28 per cent to 36.11p as it announced the relaunch of Mr Kipling cakes and sales of Nissin noodles had helped it post strong results.
The figures
Premier Foods reported a 2.4 per cent increase in revenue to £366.7m in the first half of the year.
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Adjusted profit before tax was £31.7m, a rise of five per cent compared to the first half of the previous period.
The company posted basic earnings per share of 1.5p, compared to a loss per share of 0.1 per cent the year before.
Net debt reduced from £509.5m to £492.9m.
Why it is interesting
Premier Foods is in the middle of conducting a strategic review of the business, which it said today is near completion.
Chief executive Alex Whitehouse used the publication of his first set of results in charge of the business to announce three new roles on the executive leadership team; chief customer officer, chief marketing officer and operations director.
The restructuring has led to the removal of the UK managing director and international managing director roles, he said.
The company said it is continuing to target cost savings in the next two years, and is “starting to see options regarding its future cash deployment”.
“Life will taste a bit sweeter at Premier Foods this morning after the Kipling-maker returned to making a profit. Half-year numbers at Premier Foods confirmed a slim £15m pre-tax profit versus a year ago, with debt targets also being met,” Ed Monk, associate director at Fidelity Personal Investing.
“Premier has restructured its borrowing but still owes £470.7m, although net debt is £38.8m lower than a year ago. The company today even hinted it saw ‘options for our future deployment of cash’ once debt is back under firm control.
“New boss Alex Whitehouse will be pleased with a decent start in what looks a tough job. The Oxo-to-Ambrosia company has been trying to halt a long-term slide in its share price. A turnaround plan has been talked up and investors are waiting to see hard evidence under a new management team.”
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What Premier Foods said
Chief executive Alex Whitehouse said: ““In presenting my first set of results as CEO of Premier Foods I’m encouraged by our strong start to the year with total revenue up 2.4 per cent and branded revenue ahead 4.3 per cent.
“Our biggest brand, Mr Kipling, has continued its momentum from last year, with sales growth of eight per cent while sales of our Nissin branded ranges have more than doubled.
We have launched a number of new product ranges including our new plant-based brand Plantastic and our international business returned to growth in the second quarter. Due to our strong cash generation, our net debt has reduced by £38.8m compared to the same point last year.
“I am also announcing a new executive leadership team structure which provides us with sharper consumer, customer and operational focus. Our operational strategy is unchanged, but we now have increased energy and impetus.
“We are targeting some largely operational cost savings over the next two years and we are on track to meet our Net debt/EBITDA target of 3.0x by the end of this financial year.
“With a better first half than planned, we are confident in our expectations for progress in the full year. As we look a little further ahead, and in light of our disciplined and consistent track record of net debt reduction, we start to see options for our future deployment of cash.”
Main image credit: Getty