TIDMPFD TIDMIRSH
RNS Number : 0890M
Premier Foods plc
19 January 2021
19 January 2021
Premier Foods plc (the "Company" or the "Group")
Quarter 3 Trading Statement for 13 weeks ended 26 December 2020
Another exceptional quarter of trading, now expecting Trading
profit to be in the range of GBP145-GBP150m this year after
increasing Q4 marketing investment
-- Q3 Group sales up +9.0% and up +12.5% year to date
-- Q3 Branded sales up +12.1% and +16.0% year to date
-- Continuing to outperform the market, gaining volume and value share(3)
-- Online continues to grow strongly, up +90% in Q3
-- Five major brands received advertising investment over Christmas period; more to come in Q4
-- International sales grew +43%(4) ; continuing strong trajectory so far this year
-- Further GBP40m part redemption of Floating Rate Notes due
July 2022, saving further GBP2m p.a. interest costs
-- Net debt/EBITDA(5) now expected to be below 2.0x by year end
Alex Whitehouse, Chief Executive Officer
"Quarter 3 proved to be another period of exceptional growth,
with Group sales up 9.0% and branded sales up 12.1%, as people
turned to our product ranges in the face of heightened restrictions
on out of home eating. Our colleagues have carried out a
magnificent job supplying this elevated level of demand, keeping
the business fully operational while at the same time retaining
strict measures to keep each other safe. We continue to deploy our
branded growth model strategy, launching a series of new products
in the quarter such as Sharwood's low sugar stir fry sauces and
supporting five of our major brands with TV advertising. Together
with excellent execution both instore and online, we continue to
take market share in volume and value terms. Online sales were up
90% in the quarter, ahead of the broader channel and we saw higher
household penetration for brands such as Bisto, Oxo and Paxo, as
more meals were eaten at home this Christmas."
"Looking to the remainder of the year, out of home eating is
likely to remain heavily restricted and we therefore expect to see
continued high levels of consumer demand for our products. With
more brand investment to come, we now expect Trading profit to be
in the range of GBP145-GBP150m this year and Net debt/EBITDA(5) to
fall below 2.0x by the year end."
Sales % change Q3 Q3 Year to date
-------------------------------- --------------------------------
Grocery Sweet Treats Group Grocery Sweet Treats Group
-------- ------------- -------- ------------- -------
Branded 14.6% 5.0% 12.1% 20.8% 3.7% 16.0%
Non-branded 2.4% (7.5%) (2.7%) (2.0%) (7.2%) (3.9%)
-------- ------------- ------- -------- ------------- -------
Total 12.7% 0.6% 9.0% 17.1% 1.3% 12.5%
Trading update
===============
The Group delivered another exceptional quarter of trading in Q3
with sales growth of 9.0% compared to the prior year, and 12.5%
ahead on a year to date basis. Grocery Brands were the significant
contributor to this performance, as sales increased 14.6% in the
quarter and 20.8% year to date. Sales of Non-branded products were
(2.7%) lower in the period. The Group continues to outperform its
markets, gaining both volume and value market share(3) across the
quarter.
The vast majority of the Group's Grocery brands continued to see
substantial growth with more meals eaten at home by consumers,
reflecting further pandemic lockdown restrictions in the UK. Sales
of Sharwood's cooking sauces grew by 40% in Q3 due to strong
commercial plans and new product launches while Bisto and
Batchelors both reported healthy double digit sales growth,
supported by increased investment in television advertising.
Ambrosia also delivered increased sales in the quarter, benefitting
from a new TV advertisement campaign.
The Group continued to realise household penetration gains in
the quarter, especially in its Grocery categories as consumers
looked for variety in their meals prepared at home. Online saw
sales growth of +90%, slightly ahead of the market, with notable
share gains in Flavourings and Seasonings.
In Sweet Treats, Mr. Kipling is on track for another record
year, with UK sales up 7% in the quarter, alongside further market
share gains. Mr. Kipling has continued to benefit from the launch
of new product ranges and an extended period of marketing
investment. The Group has also just launched Mr Kipling 30% less
sugar Viennese Whirls. Cadbury cake also grew market share(3) and
saw sales increase both in the UK and overseas.
Non-branded Grocery sales increased by 2.4% in the quarter as
increased demand for own label retailer brand products were partly
offset by a decline in sales at Charnwood Foods due to lockdown
restrictions. Sweet Treats non-branded sales were (7.5%) lower
following the exit of a low margin seasonal contract.
The International business grew strongly in the quarter, up
+43%(4) , partly helped by buy in of products ahead of the 31
December EU exit date. Execution of the new strategy has continued
at pace, as the Group rolls out its proven branded growth model
strategy to other markets. In Ireland, Nissin Soba noodle blocks
were launched in Q3, while in Q4 both Mr Kipling and Bisto will be
supported by TV advertising investment. In Australia, all the
Group's major listed brands, Sharwood's, Mr Kipling and Cadbury
cake delivered very healthy sales growth in the quarter. Sharwood's
also enjoyed growth across a number of other geographies, with
sales nearly doubling, and was particularly strong in the US due to
vastly improved in market execution, achieving 3,000 new
distribution points. In Canada, the in market test on Mr Kipling
cake has also performed well, with encouraging rate of sale
metrics.
In advance of the end of the EU exit transition period, the
Group developed a comprehensive set of mitigation plans and
preparations to ensure continuity of supply of its products. With a
free trade agreement with the EU now in place, the Group is not
expecting any material impact from tariff changes. To date, these
new arrangements have not resulted in any major disruption to the
Group's supply chain.
US distribution arrangement
============================
The Group's International strategy is to deliver sustainable
profitable growth with a major emphasis on in-market execution and
ensuring the most optimal route to market for its brands. In line
with this strategy, the Group has recently signed an agreement with
Weston Foods(6) to sell and market Mr Kipling cakes in the US. The
first shipments of cake are expected to commence in the first
quarter of FY21/22.
Floating rate bond part redemption
===================================
The Group today announces that following strong cash generation
in the third quarter, it will be redeeming a further GBP40m part
redemption of its Floating Rate Notes due July 2022(7) . This
follows previous part redemptions earlier this year which amounted
to GBP120m. This redemption is due to take place on 16 February
2021, will reduce the amount outstanding on the Notes(7) to GBP50m
and save the Group a further GBP2m per annum in interest costs.
Following this redemption, an aggregate of GBP160m of the Notes
will have been repaid during FY20/21, generating total pro forma
interest savings of GBP8m per annum.
A certificate has been provided to HSBC Corporate Trustee
Company (UK) Limited, as Trustee, and HSBC Bank plc, as paying
agent, for the Group's Senior Secured Floating Rate Notes due July
2022(7) , notifying of its intention to redeem GBP40 million of the
GBP90 million outstanding. This is in line with requirements of the
Indenture of the Notes(7) . Further to the certificate, the Group
hereby confirms that, pursuant to the terms of the Indenture(8) ,
GBP40 million of the Notes will be redeemed at par, plus accrued
and unpaid interest up to, but excluding, the redemption date(9) .
The redemption date is 16 February 2021 and the record date is 15
February 2021.
Capital reduction
==================
At an EGM held on 11 January 2021, a resolution for a capital
reduction was approved by shareholders. Following this approval,
confirmation by the Court is required and this is expected to be
granted in February 2021. The Board believes that this capital
reduction will provide greater flexibility in how the Company
manages its capital resources going forward, such as the ability to
pay dividends, should the Board determine it is appropriate to do
so. However, it should be noted that the Company has not made any
decision as to the use of any such realised profits.
53 week financial year
=======================
This year the Group will be presenting its Full year results for
the 53 weeks ending 3 April 2021 with the comparative period of the
52 weeks ended 28 March 2020. The Group plans to provide proforma
Revenue and Trading profit on a 52 week ending basis in respect of
this financial year's results to aid comparison against the prior
year.
Outlook
========
In a year when many peoples' lives have been altered by the
impacts of the global pandemic, the Board is hugely appreciative of
all colleagues who have helped play their part in keeping everyone
safe and the nation fed. Following the delivery of another strong
period of trading, the Group will continue to increase its
investment in brand advertising and has further new product
development planned for quarter four. The Group now expects FY20/21
Trading profit to be in the range of GBP145-GBP150m and for Net
debt/EBITDA(5) to be below 2.0x by the year end.
Ends
Further information
====================
Investors and analysts:
Duncan Leggett, Chief Financial Officer +44 (0) 1727 815 850
Richard Godden, Director of Investor
Relations & Treasury +44 (0) 1727 815 850
Media:
Headland
Ed Young +44 (0) 7884 666830
Francesca Tuckett +44 (0) 7884 667661
Conference call
================
A conference call for investors and analysts hosted by Alex
Whitehouse, CEO and Duncan Leggett, CFO, will take place today, 19
January 2021, at 9.00am, details of which are outlined below. A
replay of the conference call will be available on the Company's
website later in the day:
www.premierfoods.co.uk/investors/results-centre
Telephone number: 0800 376 7922 (UK toll free)
+44 20 7192 8000 (standard international access)
Conference ID: 6798493
Notes to editors:
1. All financial data detailed above is unaudited and has not
been subject to review by the Company's auditors.
2. All sales data relates to the 13 weeks to 26 December 2020 or
28 December 2019, the 'quarter' or the 'period', as appropriate.
Quarter 3 year to date sales data is for the 39 weeks to 26
December 2020 or 28 December 2019.
3. Market share references are UK based and sourced from IRI, 12
weeks ended 26 December 2020.
4. International sales growth is stated on a constant currency
basis and is disclosed in the Grocery segment for reporting
purposes.
5. Net debt/EBITDA stated on a pre-IFRS 16 basis.
6. Weston Foods, a subsidiary of George Weston Limited founded
in 1882, is a leading North American bakery company employing over
5,000 people in approximately 40 facilities. Source:
westonfoods.ca
7. The ISIN for the Notes are: 144A: XS1619820597 and Reg S: XS1619820324.
8. Section 3.07 (c) (Optional redemption) of the Indenture relating to the Notes.
9. Accrued unpaid interest amounts are calculated as 5.0% plus 3
month LIBOR for the period to the redemption date. There are no
Additional Amounts (as defined in the Indenture) payable.
Certain statements in this 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:
http://www.premierfoods.co.uk/media/image-gallery
Quarter 3 and Quarter 3 year to date sales
===========================================
GBPm Quarter 3 Quarter 3 Year to date
2020/21 2019/20 Change 2020/21 2019/20 Change
Grocery
Branded 176.5 154.0 14.6% 449.6 372.1 20.8%
Non-branded 27.7 27.1 2.4% 71.4 72.9 (2.0%)
-------- -------- ------- -------- -------- -------
Total 204.2 181.1 12.7% 521.0 445.0 17.1%
Sweet Treats
Branded 55.0 52.4 5.0% 149.2 143.9 3.7%
Non-branded 26.6 28.7 (7.5%) 37.1 40.0 (7.2%)
-------- -------- ------- -------- -------- -------
Total 81.6 81.1 0.6% 186.3 183.9 1.3%
Group
Branded 231.5 206.4 12.1% 598.8 516.0 16.0%
Non-branded 54.3 55.8 (2.7%) 108.5 112.9 (3.9%)
-------- -------- ------- -------- -------- -------
Total 285.8 262.2 9.0% 707.3 628.9 12.5%
-------- -------- ------- -------- -------- -------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTFLFVDLRITLIL
(END) Dow Jones Newswires
January 19, 2021 02:00 ET (07:00 GMT)
Premier Foods (LSE:PFD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Premier Foods (LSE:PFD)
Historical Stock Chart
From Sep 2023 to Sep 2024