TIDMPFD
RNS Number : 9500C
Premier Foods plc
23 April 2013
23 April 2013
Premier Foods plc
Interim Management Statement for the three months ending
31 March 2013
Power Brands growth momentum continues
Premier Foods today reports the Company's Interim Management
Statement for the three months ending 31 March 2013.
Highlights
-- Sales excluding Milling of GBP327m up 1.0%, Branded sales up 2.2%
-- Grocery Power Brand sales increased 3.5%
-- Five successive quarters of Grocery Power Brands sales growth
-- SG&A cost savings programme on track
-- Full Year expectations unchanged
Gavin Darby, Chief Executive Officer said:
"I am pleased to report continued momentum in our Power Brands
in the first Quarter. This represents the fifth successive quarter
of sales growth for our Grocery Power Brands, demonstrating that
our strategies of investing in marketing and improving customer
collaboration are working. Five of our Power Brands have been on TV
in the past weeks, with more to come in the second Quarter.
"The restructuring of our Bread business remains on track while
the benefits of the previously announced GBP20m of overhead cost
savings in 2013 are being delivered.
"Despite a continued challenging consumer environment, I believe
we have the right strategies in place to make further progress this
year, with expectations unchanged."
Introduction
Sales(1,2) for the three months to 31 March 2013 increased by
1.0% to GBP327m compared with the prior year while Power Brands
sales increased by 3.3%. Branded sales were up 2.2%, primarily
reflecting the Power Brands performance, while Grocery Power Brands
continued the trend seen in 2012, increasing by 3.5%.
Support brand sales decreased by 1.9% in the quarter while
non-branded sales were down 5.0% due to low margin net contract
losses in both Grocery and Bread divisions.
GBPm 2013 Q1 2012 Change
Q1
Power Brands 222 215 3.3%
Support brands 53 53 (1.9%)
-------- ------ -------
Total branded 275 268 2.2%
Non-branded 52 55 (5.0%)
-------- ------ -------
Total sales(1,2)
(ex. Milling) 327 323 1.0%
-------- ------ -------
Grocery Power Brands 128 124 3.5%
Grocery
Grocery Power Brands sales increased by 3.5% in the first three
months of the year while total Grocery sales were up 1.1%. This
performance, the fifth successive quarter of Grocery Power Brands
growth, demonstrates that the Company's strategies of focusing
investment behind its Power Brands and improving customer
collaboration are delivering consistent progress.
The Company's commitment to investing in marketing its brands in
line with consumer trends continued, with five of the Grocery Power
Brands benefitting from television advertising in the quarter.
The Sharwood's brand delivered strong sales in the period due to
the excellent execution of Chinese New Year and the 'Serve up some
excitement' advertising campaign. Bisto and Oxo also benefitted
from new advertising and improved customer collaboration in the
quarter and were successful in gaining share in a growing category.
Ambrosia additionally grew share in the growing ambient desserts
market in the quarter, while advertising of Ambrosia custard
returned to television for the first time in over ten years.
Two new products being launched in the first half of 2013 -
Oxo's new 'Shake and Flavour' and Ambrosia's 'Devon Dream' -
illustrate the Power Brands' potential to expand into adjacent
categories.
Consumer marketing investment expectations for 2013 are
unchanged, although the phasing of expenditure is expected to be
more equally balanced through the year than 2012.
Bread
Sales in the Bread business (excluding Milling) were 0.8% ahead
of the same period last year and market share of Hovis was broadly
unchanged. In the second quarter, the Hovis brand will benefit from
a new packaging re-design giving strong standout on shelf in this
highly competitive category.
The Bread business is focusing on a major restructuring
programme during this year, with the closure of three bakeries, two
distribution centres, a Mill and a significantly reconfigured
logistics network. This programme is on track, with the closures of
the Eastleigh bakery and Glasgow Mill having been completed in the
first quarter.
The savings from the restructuring programme are expected to
offset the margin lost from the previously announced contract loss,
which is expected to take effect by the end of April. This contract
accounts for approximately GBP75m of annual sales. Following the
decision to organise the Grocery and Bread divisions separately,
the Bread business will operate from the Company's High Wycombe
offices from the third quarter this year.
SG&A
The Company remains on track to deliver the previously announced
GBP20m cost savings in 2013.
Financial Position
The Company's financial position and Net debt expectations for
2013 remain unchanged, with recurring free cash flow generation in
the year expected to be in the range of GBP40-60m.
Outlook
The Company believes the right strategies and plans are in
place, including the delivery of cost savings, to make further
progress in 2013. While the markets in which it operates are
expected to remain challenging for the duration of the year,
expectations are unchanged.
Ends
For further information, please contact:
Institutional investors and analysts:
Mark Moran, Chief Financial Officer +44 (0) 1727 815 850
Richard Godden, Head of Investor Relations +44 (0) 1727 815 850
Media enquiries:
Lisa Attenborough, Director of Communications +44 (0) 1727 815 850
Maitland +44 (0) 20 7379 5151
Tom Buchanan
Tom Eckersley
Conference Call
A conference call for investors and analysts will take place on
23 April 2013 at 8.00am, details of which are outlined below. A
replay of the conference call will be available on the Group's
website, www.premierfoods.co.uk.
Telephone number: +44 20 3003 2666
Telephone number (UK Toll free) 0808 109 0700
Password: Premier Foods
Notes to editors:
1. All sales data for Premier Foods is for the three months to
31 March 2013 or 31 March 2012 as appropriate.
2. Sales are stated excluding Milling sales and all previously completed disposals.
Certain statements in this Interim Management Statement are
forward looking statements. By their nature, forward looking
statements involve a number of risks, uncertainties or assumptions
that could cause actual results or events to differ materially from
those expressed or implied by those statements. Forward looking
statements regarding past trends or activities should not be taken
as representation that such trends or activities will continue in
the future. Accordingly, undue reliance should not be placed on
forward looking statements.
A Premier Foods image gallery is available using the following
link:
www.premierfoods.co.uk/media/image-gallery/
This information is provided by RNS
The company news service from the London Stock Exchange
END
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