Premier Foods took another step in its City turnaround this week by paying out its first investor dividend for 13 years, after a bumper year of sales and profit growth.

Revenues in the year ended 3 April rose 10.3% to £934.2m amid a Covid-driven home cooking boom, while trading profits rose 11.9% to £148.3m and pre-tax profits more than doubled to £122.8m.

The surging sales were underpinned by a 13.6% jump in its branded volumes, with the likes of Bisto, Oxo, Ambrosia, Sharwood’s, Homepride, Paxo and Nissin “standout performers”.

Crucially Premier was able to attract new shoppers to its brands as dining occasions shifted back into the home, resulting in a significant increase in household penetration for Bisto, Oxo, Sharwood’s and Paxo, with a million or more new households buying into their ranges.

It wasn’t all plain sailing during the pandemic, though. Growth in the sweet treats division, which houses Mr Kipling, was more muted as consumers focused more on cupboard staples. Premier’s non-branded business also declined in both the grocery and sweet treats divisions in the year, falling by 5.3% and 8.4% respectively.

However, its bottom line progress and a further 23% cut in net debt down to £332.7m saw Premier reinstate a shareholder dividend for the first time in over a decade at 1p per share.

Peel Hunt said the performance represented “a year of serious progress” and noted that, despite a likely slowdown in the coming months due to tough comparisons, Premier was likely to be well up on its pre-pandemic figures of 2019.

Jefferies said Premier has “banished two ghosts from the past” with leverage is at its lowest since IPO in 2004 and the payment of a dividend is being paid, while Shore Capital noted: “Premier is now a ‘conventional’ business with equity valuations that are not; they are too low [given] its strong market positions and growing brand strength.”

Premier shares jumped more than 6% in early trading to 108.8p to trade close to eight-year highs before settling down to end the day flat at 102.4p.

Elsewhere, mixer maker Fever-Tree saw a 6.9% surge to a post-pandemic share price high of 2,739p by Thursday lunchtime, after announcing growing off-trade sales in the first quarter. It saw retail sales rise 10.1% in the UK and 38.2% in the US amid a fundamental shift towards at-home cocktail drinking.

The group said it remained “well placed” to benefit from the reopening of bars, pubs and restaurants following lockdowns, though the recovery in mainland Europe is expected to lag its key UK and US markets.

Broker Jefferies said Fever-Tree was currently in a two-way battle between “the longer-term opportunity for premium mixers [and] margin pressure from both investment and negative geographic mix

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