Premier Foods bolstered by strong branded sales

By Anita Awbi

- Last updated on GMT

Related tags Premier foods

UK manufacturer Premier Foods has said it expects to deliver strong
half-year profits as sales of household names Branston and Ambrosia
perk up and the newly acquired Quorn brand enjoys a double-digit
rise in demand.

In a trading statement for the six months to 1 July, the food group said it expects like-for-like sales growth to be in line with expectations, supported by the strong performance of several key brands.

The Convenience Foods, Pickles, Sauces and Meat Free division looks set to post sales significantly ahead of those in the first-half of 2005, due to the purchase of Quorn and Cauldron vegetarian food brands.

"We are delighted at the progress of Quorn which has seen double digit sales growth in the first half, driven by increased advertising and the launch of new products,"​ said the company.

The growth of Branston Baked Beans and Loyd Grossman sauces look likely to deliver similar like-for-like sales as last year, but will be offset by lower sales in smaller label and private label convenience foods.

Sales in the Spreads, Desserts and Beverages unit will be ahead of last year's £132m (€189.9m), due to the strong performance of the Ambrosia brand driven by new product launches to include snacking formats and new private-label contracts.

However, CEO Robert Schofield said "cost pressures remain an issue"​ for the company but it is taking steps to offset these pressures.

Last year the maker of Bird's custard and Sarson's vinegar weathered the difficult trading environment to achieve an overall 13.3 per cent rise in trading profits, excluding exceptional items and amortisation.

This followed a strategic year for the company, which acquired Bird's desserts from Kraft, Quorn meat-free range from Marlow Foods, Gedney's fresh vegetable supplier and Cauldron's vegetarian range.

During 2005 Premier Foods fought to maintain its position, as its potato business continued to decline and impact on performance. But the company is now beginning to profit from a string of acquisitions that are now successfully consolidated.

Last year Premier Foods increased its total marketing spend by £5m to £27.7m, using the budget to push existing brands and run a television advertising campaign for Quorn and Cauldron Foods.

The firm will continue to spend heavily on marketing, with a new television advertising campaign for Branston Baked Beans coming up which is aimed at increasing household penetration of the newly launched product.

Overall, Premier Foods reported a 2005 group turnover of £789.7m, up six per cent from 2004's £744.7m - making it Britain's fourth largest food producer.

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