Turnaround Strategy Starting to Deliver at Premier Foods
UK convenience food group Premier Foods has increased underlying business trading profit by 50% to £47.4 million for the first half of 2013. Underlying business sales slipped 0.9% to £621.2million.
Underlying business excludes the results of previously announced business disposals, Milling sales and strategic contract withdrawals. The purpose is to reflect the underlying performance of the core business of the company, after undergoing a year of major restructuring in 2012.
Gavin Darby, chief executive of Premier Foods, comments: "A 50% increase in trading profit is a very encouraging result given the highly competitive environment. This shows that our turnaround strategy is delivering at the bottom line. We have now grown sales in our Grocery Power Brands for six consecutive quarters as we continue to build partnerships with our customers, deepen our understanding of consumers and invest more effectively in supporting our brands."
Premier Foods has already delivered the promised £20 million of overhead cost savings for 2013 and continues to keep a tight control over costs. The restructuring of the problematic bread and milling business is ahead of plan as Premier Foods attemps to create a more sustainable platform for the business.
He continues: "The second half will see further plans to grow our Power Brands, in addition to a new £10 million of cost savings that we have now identified from our efforts to reduce complexity. As a result, we now expect full year trading profit to be around the top of market expectations."
Gavin Darby elaborates: "Looking further forward, we will continue to drive profitable top-line growth by focusing on growing our categories supported by ongoing cost savings from reducing complexity. At the right time, we will address our capital structure – from a position of growing strength given the delivery of our turnaround plan and the performance of our Power Brands. I am excited by the potential offered by Premier Foods in the longer term."
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