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Premier Foods (PFD) has posted the first quarterly increase in branded sales for two years this morning as it announces the introduction of a new brand from Great British Bake Off judge Paul Hollywood (exclusively revealed by The Grocer in July - click here for full story).

The Mr Kipling and Bisto owner lifted branded sales 0.1% in the 26 weeks ended 3 October thanks to a 1.6% rise in the second quarter. Overall revenues were still down £2.7m to £341.2m, compared to the first half a year ago, but branded sales came in just up at £306.6m.

The performance helped trading profit increase 8.4% to £50.6m and operating profit was back in the black at £23.3m, compared to a £12.8m loss last year after impairment charges too their toll.

CEO Gavin Darby said: “We are pleased to see group branded sales growth in both the first half and second quarter of this financial year, as well as trading profit progression. This reflects the clear benefits from our continued commitment to brand investment and innovation. It is also encouraging to see strong sales growth in our international business following the investment we’ve made in additional resources.”

Mr Kipling and the sweet treats division was again the star performer in the half and is on track to deliver double-digit margins in FY15/16, a year earlier than previously expected.

“In the third quarter of the year, we expect to deliver positive group branded sales growth, with sweet treats performing more strongly than grocery. 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.”

Premier added branded sales growth for full year was expected to come in at 1 to 2%. Net debt is also expected to come down “significantly” in the second half from £585.3m.

The positive update has sent shares soaring more than 18% this morning to 42.3p – the highest the stock has been since the start of June.

Morning update

Retails sales in the UK slowed down in October with shopped holding back purchases ahead of Black Friday. The latest index from the British Retail Consortium and KPMG revealed like-for-like sales in the sector actually fell 0.2% last month compared with a year ago. It follows strong growth of 2.6% in September and was lower than expected by the City.

Total Food sales grew 0.5% over the three months to October, and 0.3% over the 12months, which the BRC said was its best performance since July 2014. However, on a like-for-like basis sales were still down 1.1% and deflation continues to hurt food retailers.

BRC chief executive Helen Dickinson said: “A number of categories which we’d typically expect to be popular on Black Friday saw a slowdown in October, suggesting that some shoppers may be holding out in the hope of some great deals at the end of November.”

IGD boss Joanne Denney-Finch added: “After a couple of months of modest growth, the food and drink year-on-year comparison in October fell back into marginally negative territory. Even Halloween falling on Saturday didn’t deliver a decisive boost and England’s early exit at the Rugby World Cup dented hopes for exceptional alcohol sales. Deflation continues to dampen down the figures which is good news for shoppers, even though most view it as a short-term windfall.”

Produce Investments has provided an update on The Kent Potato Company following the announcement on 8 October that it was closing the Kent packing facility. The 45-day consultation period with employees has now ended and Produce Investments confirmed packing operations will cease in early December, with volumes transferring to sites in the Scottish Borders and Cambridgeshire.

In early morning trading, Morrisons has slumped by almost 3% to 159.1p and Tesco by 2.7% to 173.8p, with the FTSE 100 nudging up 0.1%

Yesterday in the City

It was a day of general declines in the sector as the FTSE 100 slipped 1% to a three-week low at 6,295 points on the back of slumps for mining and utility companies.

Morrisons (MRW) lead the way with a fall of 2.9% to 163.8p, with Tesco (TSCO) not much better off at 2.4% down to 180.4p after broker Shore Capital downgraded its financial forecasts for the supermarket.

Sainsbury’s (SBRY) ended the day in the red despite trading above Friday’s closing price for most of the day. The stock finished 0.5% down at 273.3p ahead of the retailer’s interim results tomorrow.

Premier Foods (see above) fell again ahead of its half-year figures, down 2.1% to 36.5p.

Sandwich and ready meal maker Greencore (GNC) managed to buck the trend yesterday by closing 3.7% higher at 317p.

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