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Premier Foods has grown first-half sales supported by double-digit volume growth as consumers switched back to brands.
CEO Alex Whitehouse said shoppers were starting to feel more confident as inflation began to ease, treating themseleves to Mr Kipling Signature Bites and Ambrosia Deluxe, which both more than double sales in the half.
Headline revenues climbed 4.6% to £498.7m in the 26 weeks to 28 September, with branded sales outpacing group growth, rising 6.8% to £444.7m.
Premier attributed the branded rise to strong innovation and sharper promotional pricing.
Branded grocery revenues increased 7% in the period, while sweet treats were up 6.1%, with volume and value market share gains.
Headline trading profits rose 5.5% to £70.2m and adjusted pre-tax profits were up 8.9% to £61m.
“We gained both volume and value market share, outperforming the market as many consumers switched into our leading brands from own label,” Whitehouse added.
“Our innovation programme continues apace as we brought many new products to market in the period, including Sharwood’s curry kits, Mr Kipling Loaf cakes and Loyd Grossman Pesto.”
Whitehouse said the recently acquired brands, The Spice Tailor and Fuel 10K, were also performing well and claimed the group now had the biggest selling granola on the market.
“As we look to the second half, we have exciting plans in place across all our brands, with our best ever Mr Kipling Signature mince pies benefitting from expanded distribution,” he added. “With this, and our continued branded momentum, we are on track to deliver on expectations for the full year. As we look further ahead, we expect revenue growth to continue to be generated from our strategic priorities of growing our UK branded core, extending into new categories, overseas expansion and M&A activity.”
Net debt at the group came in £52m lower at the end of the half at £221.3m.
Overall pre-tax profit was 7.9% lower year on year to £53.5m as trading profit growth was offset by a lower pensions credit.
Shares in Premier have jumped 4.5% to 196.3p as markets opened. The stock is up 45% so far this year and is trading at a 13-year high.
Morning update
A “strong” year at WH Smith has seen a double-digit increase in profits as the group’s travel business goes from strength to strength.
Total revenues in the year ended 31 August 2024 rose 7% to £1.9bn, with the travel division up 11%.
However, the high street stores continued to decline, with sales down 4% to £452m.
Headline pre-tax profits increased 16% to £166m, with travel profits up 15% to £189m, while high street profits were flat at £32m.
The group proposed a final dividend of 22.6p a share, esulting in full year dividend of 33.6p per share, up 16% on the prior year, which it said reflected strong business performance and confidence in the future prospects.
CEO Carl Cowling said WH Smith has delivered “an excellent performance” throughout the year, particularly over the key summer trading period.
He added the most exciting opportunity for growth was in North America, with more sites set to open in airports across the country.
“The new financial year has started well,” Cowling added. “While there is some economic uncertainty, we are confident that 2025 will be another year of good progress for the group.”
WH Smith shares tanked by 4.2% to 1,242p as markets opened.
B&M Bargains is “well set up” for the Golden Quarter as volumes and revenues grew in the first half.
Group revenues increased 3.7% to £2.6bn in the 26 weeks to 28 September.
UK growth slowed down in the half, up 3.7% compared with 8.1% in the same period a year ago.
B&M said UK sales growth improved as the half went on, with growth accelerating from 1.5% in Q1 to 6% in Q2.
Adjusted EBITDA was up 2% to £274m, but pre-tax profits fell 24% year on year to £169m following one-costs related to foreign exchange derivatives.
CEO Alex Russo said: “This is a good performance as we annualise a record prior year of earnings growth with strong first half comparatives.
“As we trade through the Golden Quarter, we are encouraged by recent volume momentum and remain focussed on delivering profitable, cash-generating growth for all of our shareholders.”
B&M shares soared 4.6% to 397.1p in early trading.
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