Premier Foods plc Pensions Update (6719A)
March 28 2017 - 2:00AM
UK Regulatory
TIDMPFD TIDMIRSH
RNS Number : 6719A
Premier Foods plc
28 March 2017
Premier Foods plc
("Premier Foods" the "Company")
28 March 2017
Pensions update
-- 2016 Actuarial Valuations now agreed with all UK pension schemes
-- Cash payments to schemes reduced by further GBP32m over next three financial years
In March 2014, as part of a wider re-financing of the Company,
Premier Foods agreed a schedule of pension deficit cash
contributions with the Trustees of the Company's pension schemes,
with payments fixed for nearly six years; from April 2014 until
December 2019.
Following finalisation of the 2016 actuarial valuations, the
Company is pleased to announce today a revised schedule of pension
payments which significantly reduces the Group's cash outflow over
the next three years. This new agreement includes:
-- Reductions and re-phasing of deficit contributions to the Premier Foods' schemes(1)
-- No deficit contributions to the RHM schemes in the recovery plan
-- Administration costs over the next three years to be part
funded by RHM schemes by GBP2m per annum
Overall, the total cash costs from April 2017 until March 2020
to the RHM and Premier Foods Pension Schemes will be approximately
GBP32m lower than outlined in our Interim Results on 15 November
2016.
Alastair Murray, Chief Financial Officer, said:
"We are pleased to have agreed a reduction in our pension scheme
obligations with the scheme Trustees as we continue to focus on
maximising the Company's free cash flow generation and debt
reduction. While this has been a challenging negotiation, we
appreciate the open and constructive dialogue which has taken place
with all pension scheme Trustees in arriving at this revised
agreement."
The revised schedule of payments over the next six years of the
recovery period is outlined in the table below.
GBPm 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
New plan
Deficit contributions 35 35 37 38 38 38
Administration
costs 4-6 4-6 4-6 6-8 6-8 6-8
------- ------- ------- ------- ------- -------
Total 39-41 39-41 41-43 44-46 44-46 44-46
Previous plan
(as November 2016)
Deficit contributions 49 44 40 33 33 35
Administration
costs 6-8 6-8 6-8 6-8 6-8 6-8
------- ------- ------- ------- ------- -------
Total 55-57 50-52 46-48 39-41 39-41 41-43
Reduction/(Increase)(2) 16 11 5 (5) (5) (3)
------- ------- ------- ------- ------- -------
As part of these overall reductions, the Company has also agreed
with the Premier Foods schemes a mechanism (including limited
changes to the existing dividend matching agreement) to allow the
schemes limited further cash contributions in the event the Company
outperforms certain agreed profit targets. These targets are
materially ahead of current market expectations for the
Company.
The net present value of future deficit payments, to the end of
the respective recovery periods remains at c.GBP300-320m.
For further information please contact:
Alastair Murray, Chief Financial
Officer
Richard Godden, Head of Investor +44 (0) 1727 815850
Relations +44 (0) 1727 815850
Maitland
Kate O'Neill +44 (0) 20 7379
Tom Eckersley 5151
Notes to editors:
1. The Premier Foods schemes include the Premier Foods Pension
Scheme and the Premier Grocery Products Pension Scheme
2. Assumes mid-point of reduction in payments when comparing new and previous plans
This information is provided by RNS
The company news service from the London Stock Exchange
END
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