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Premier Foods keeps H1 profit expectations

Staff Writer | October 12, 2016
Premier Foods warned that first-half trading profit was likely to be slightly below the previous year and posted a drop in second-quarter sales due to warmer weather.
Premier Foods
Premier Foods   CEO is disappointed
In a trading update for the 13 weeks to October 1, the company said total group sales fell 5.4% from the same period last year to £172.5m. They were down 1.8% in the first half.

Although trading profit is expected to be down on the prior year, Premier said its profit expectations for the full year remain unchanged "due to the careful management of costs".

Grocery sales were down 9.5% from the same period last year and 4% lower in the first half. The company said that while this performance was disappointing, the Grocery innovation programme in the first half has been well received, particularly the Ambrosia Deluxe range.

It was a brighter picture for the Sweet Treats division, which saw its sixth consecutive quarter of growth at 6.4%, as both the branded and non-branded businesses delivered increases from new products and new business wins respectively.

The International business also continued to make good progress, with sales up over 13% in the period and Cadbury cake ranges launched in the United Arab Emirates for the first time towards the end of the quarter.

CEOGavin Darby said: "We are disappointed that our grocery business reported materially lower sales in the quarter due to warmer weather; particularly in September. However, our Sweet Treats and International businesses continued to demonstrate their strong momentum, delivering against our strategic priorities and growing over 6% and 13% respectively."

"We remain very confident in our strategic progress, our customer relationships are strong and we have an extensive new product innovation programme planned for the balance of the year. We expect group sales to grow between 2-4% in the second half of the year and our profit expectations for the full year remain unchanged."