Branded sales rose by 1.6% in the second quarter and by 0.1% for the 26 weeks to October 3 2015.
Trading profit climbed by 8.4%, with adjusted profit before tax up by 21.6% and adjusted earnings per share 21.9% higher. Operating profit reached £23.3M, up £36.1m on the first half of financial year 2015.
Ceo Gavin Darby welcomed group branded sales growth in both the first half and second quarter of this financial year plus growth in trading profit. “This reflects the clear benefits from our continued commitment to brand investment and innovation,” said Darby.
‘Strong sales growth’
“It is also encouraging to see strong sales growth in our International business following the investment we’ve made in additional resources.”
Group branded sales growth will continue in the third quarter of the year – with Sweet Treats performing more strongly than Grocery – predicted Darby.
“The industry backdrop remains a challenging one, but with strategies which are delivering tangible results and significantly higher marketing spend planned for the second half, our profit expectations for the year remain unchanged.”
Double digit margins
Premier’s Sweet Treats business was on track to deliver double digit margins in financial year 2015/2016 a year earlier than previously expected, he claimed.
“Looking further forward, we remain committed to investing for sales and profit growth, and expect to deliver branded sales growth for the group of 1-2% in financial year 2016/2017 and the medium term.”
Shore Capital praised the results noting the encouraging top-line momentum. The analyst's Clive Black and Daren Shirley noted: “The welcome news at the ‘bottom-line’ is a function of better trading, itself the output of considerable hard work and execution by the Premier team in our view.”
The analysts repeated their ‘Buy’ advice on Premier Foods’s stock.
Meanwhile, the manufacturer’s edible poster campaign helped it win the Bakery manufacturing company of the year in the Food Manufacture Excellence Awards last week. Read the full list of Oscar winners and finalists here.
Premier Foods’s results at a glance
- Branded sales rose by 1.6% in the second quarter and 0.1% for the 26 weeks to October 3 2015
- Trading profit up by 8.4%
- Adjusted profit, before tax, up by 21.6%
- Adjusted earnings per share 21.9% higher
- Operating profit reached £23.3M, up £36.1M on the first half of financial year 2015
- Net debt of £585.3M to “reduce significantly” in second half
- Combined pension deficit cut to £32.8M from £211.8M