Premier Foods shares jump 10% as producer Mr. Kipling raises dividends after earnings exceed expectations of home cooking growth

  • Premier Foods’ profit for the 52 weeks to the beginning of April remained at 148.3 million pounds
  • Revenue fell last year as loosening Covid restrictions led to lower product sales
  • The company announced a dividend of 1.2 pence per share, which is 20% more than last year

The company behind the Angel Delight and Loyd Grossman sauces was the leader in the FTSE 350 on Wednesday after its profits exceeded expectations.

Promotions of Premier Foods rose 10.1 per cent to 117.4 pence when the firm offered a dividend payment of 1.2 pence a share, up 20 per cent from last year when the food maker paid its first 13-year dividend.

This was followed by another solid set of annual results: trading profit for the 52 weeks to early April at the previous 52 weeks was 148.3 million pounds – 3.3 million pounds more than projected in January.

Domestic boom: food restrictions for most of 2020 and 2021 have led to more people eating at home, increasing demand for the company’s food and confectionery products

Adjusted pre-tax earnings and earnings per share also exceeded expectations, with the former being helped by halving interest costs over the past two years and the sales boom caused by the pandemic.

Covid-related restrictions on outdoor nutrition for most of 2020 and 2021 have led to people eating more often at home, which has increased the company’s demand for food and confectionery.

Among the products whose popularity in Premier Foods grew significantly during the Covid-19 pandemic – Sharwood’s and Bisto sauces and powdered dessert product Angel Delight.

Another “big success” that the business noted was the Japanese range of Nissin noodles, which has tripled its share of the real snack market since 2017, thanks to 130 percent sales growth over the past two years.

Grocery sales declined as restrictions eased and pubs and restaurants reopened, bringing the firm’s total revenue down by £ 33.7 million in fiscal 2021/22.

However, they remain 5.9 percent more than two years ago, while confectionery sales rose 7.3 percent last year due to the fact that branded products such as Cadbury Cake and Deluxe Millionaire Whirls Mr. Kipling’s signature collection, showed very good results.

Sweets: Among the products whose popularity in Premier Foods grew significantly during the beginning of the Covid-19 pandemic, there is a powdered dessert product Angel Delight

Sweets: Among the products whose popularity in Premier Foods grew significantly during the beginning of the Covid-19 pandemic, there is a powdered dessert product Angel Delight

In fact, Mr. Kipling’s brand had a record year of sales thanks to growing demand in Australia and Ireland, which helped his international income with a constant exchange rate grow by 25 percent in two years.

The brand is going to launch the Deliciously Good range of cakes later this year, recently releasing Viennese cakes 30% less sugar and first selling cookies.

CEO Alex Whitehouse told investors: “As we seek to go beyond our core business in the UK, we have made great initial progress using the power of our leading brands by entering a number of related new categories.”

He added that trade since April had been “encouraging” and that market share growth had been driven by customers looking for good food, and expressed optimism that the company would spend “another year of good progress”.

However, the group warned that rising prices for customers are likely to occur after the escalation of the Russian-Ukrainian war and the subsequent rise in commodity prices such as wheat and dairy products, and rising energy prices.

Premier Foods’ annual results come on the same day as the UK’s main consumer price index reached 9 per cent in April, the highest level in four decades, although the Bank of England expects the figure to rise even higher, leading to to even worse compress real incomes.

Spiral electricity bills contributed the most to inflation, but food costs were another major factor that grew at the fastest pace in 11 years as staple products such as lamb, beef and butter increased in double digits.

Against this backdrop, AJ Bell investment director Ras Mold said: “Although Mr Kipling’s range has just received the best year in history, Premier Foods faces the risk that shoppers will trade for cheaper alternatives to their own brand amid heavy pressure on home budgets.

“It will be a good test of the brand’s appeal, including products like OXO cubes and Bisto sauce granules. Many of them are essentials, but will consumers be willing to pay more for the flavors they know and love? ‘

Advertising



https://www.dailymail.co.uk/money/markets/article-10829011/Premier-Foods-shares-climb-profits-beat-expectations.html?ns_mchannel=rss&ns_campaign=1490&ito=1490

Previous articleWar in Ukraine: Russia moves “Terminator” around the city before the expected attack, says military expert | World news
Next articlePlatinum Jubilee: Brits scared of blue and red Platinum Jubilee fish n chips | Great Britain | News