Sales of Premier Foods ‘power brands’ grew 2.1% last year - contributing to a 10.6% hike in profits to £123.4m.

Presenting its annual results this morning, the company reported total sales (excluding its milling business) up 3.2% year-on-year to £1.3bn, and sales of power brands such as Hovis, Sharwoods, Bisto and Loyd Grossman up from £871.2 last year to £889.2.

These figures were based on an ‘underlying business’ basis that Premier said gave a better picture of the performance of the company following the restructuring that took place in 2012. They exclude the results of previously announced disposals, sales from its milling business and non-core contract losses.

Over the period, its total sales of grocery products rose 5.6% to £856.7, while sales from its bread division fell 0.7% to £688.5m.

CEO Gavin Darby, who joined the business last month following the departure of Michael Clarke, said the management team had done “a great job” in laying the foundations for future growth. “I am very excited to be working with them to develop and grow our power brands in the coming years,” he added. “It’s important now to maintain continuity and focus on executing our existing strategies to build further momentum in grocery while re-building value in bread.”

The power brands had been the focus of a £39.4m spend on consumer marketing last year  – up from £24.7m in 2011. Premier said it expected marketing spend to be similar in 2013.

The figures also showed that revenue from continuing operations was £1,756.2m,down £243.3m on the previous year. Premier attributed the decline to the disposals of the canned grocery operations, its Irish brands, vinegar and sour pickles, Elephant Atta flour and sweet spreads and jellies businesses, partly offset by power brands sales growth.

Premier chief financial officer Mark Moran said the company had delivered against its strategic priorities by reducing net debt levels, cutting costs, working more collaboratively with customers and generating growth in the Power Brands. “While it’s clear that markets will remain challenging in 2013, we believe we have the right strategies in place, including the delivery of further overhead cost savings, to make further progress this year”, he added.

Topics