Premier Foods has raised its profit guidance after a strong Christmas quarter for its branded products.
The group’s sales were up 3.1% to £298.9m as branded revenue from the likes of Mr Kipling and Loyd Grossman grew 4.6% in the 13 weeks to 28 December 2024. Branded volumes were up 7%.
While own label sales fell 3.6%, the company is forecasting its annual profit will fall at the upper end of analysts’ expectations, which range from £180.1m to £186.4m.
Shares in the company surged 5.7% to 189.3p as markets in London opened this morning.
“Earlier this year, we said that consumers are starting to trade up and treat themselves more,” said Premier CEO Alex Whitehouse. “This has continued over Christmas with our premium ranges such as Ambrosia Deluxe desserts, Bisto Best gravy and Mr Kipling Signature Brownie Bites performing strongly.”
All five of the company’s growth pillars saw success, with standout performances for ‘new categories’ where sales shot up 38%, led by Ambrosia porridge pots and Cape Herb & Spice. International sales rose 29%.
There was also double-digit growth from the acquired brands The Spice Tailor and Fuel10K. The Spice Tailor’s sales were boosted by the launch of East Asian sauce kits, while Fuel10K launched multigrain flakes in the quarter.
Analysts at Peel Hunt noted Premier had focused on driving volume growth as it allowed the company to reinvest the volume efficiencies into promotion and price. This had driven further market share gains in both value and volume terms.
Premier’s sweet treats business, made up of products like Mr Kipling and Cadbury cake, had a particularly strong Christmas, with sales up 8.9%. Mr Kipling sold 20% more mince pies this year, its biggest-ever quarter.
Premier recently announced it had extended its licence with Mondelez to manufacture and sell Cadbury cake and ambient desserts through to 2028.
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