Source: Sharecast
The FTSE 250 food producer - which provides retailers with own-brand groceries and sweet treats as well as selling brands such as Oxo and Ambrosia - posted a 2.4% rise in revenues in the 26 weeks to 26 September, to £514.2m, while trading profits sparked 2.4% to £72.2m.
Sweet treat revenues jumped 6.9%, to £142.2m, helped by a 10% surge from Mr Kipling. But in grocery, sales nudged up just 0.9% to £372.3m after a 2.1% rise in branded revenues was partially offset by a 12.2% slide in the non-branded segment. The weaker performance was attributed to contract exits and unusually hot weather hitting sales of soups and desserts.
On a statutory basis operating profits fell 13% to £63.7m.
Alex Whitehouse, chief executive, said: "Some of our grocery categories were impacted by prolonged periods of hotter weather. However, our business and brand portfolio are now significantly more resilient, due to our expansion into new categories, overseas growth and M&A strategy, so therefore much less impacted by seasonal variations."
Looking ahead, Premier - which employs around 4,000 people - acknowledged it would continue to monitor the macroeconomic and geopolitical environment and would "take action" if required.
But it reiterated forecasts for trading profit to grow by around 3% to 5% year-on-year, with adjusted pre-tax profits and adjusted earnings per share on course to come in at the top end of current market expectations.
As at 1030 GMT, the stock had shed 3% at 196.4p.
Shore Capital said: "Against the backdrop of imperfect UK trading conditions for Premier Foods’ assortment - that would be a very hot summer - [Premier] has displayed further evidence of outperformance and resilience in its commercial delivery while the financial mechanics of the firm, for long-term watchers, is again on the upside.
"Against this backdrop, group branded revenue growth is more than commendable…driven by the venerable Mr Kipling.
"Accordingly we technically upgrade our EPS estimates but - to us, much more fundamentally - revert to a theme of a self-improving firm that has a balance sheet to eventually deliver for investors and as such merits a much higher equity rating over time."
Premier Foods is a corporate client of Shore Cap.
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