Premier Foods plc Q2 Trading Update (2796M)
October 12 2016 - 2:00AM
UK Regulatory
TIDMPFD TIDMIRSH
RNS Number : 2796M
Premier Foods plc
12 October 2016
12 October 2016
Premier Foods plc (the "Company" or the "Group")
Trading update for the 13 weeks ended 1 October 2016
Premier Foods plc today provides the following update for its
second quarter trading; the 13 weeks ended 1(st) October 2016.
In the second quarter of the year, total Group sales were
GBP172.5m, a (5.4%) decline on the prior year. In the first half,
Group sales were (1.8%) lower while Trading profit is expected to
be slightly lower than the prior year. The Group's profit
expectations for the full year remain unchanged due to the careful
management of costs.
The Sweet Treats and International businesses performed well in
the second quarter. However, the month of September was the second
equal warmest since records began and every week in the quarter was
warmer than the prior year. This had a resultant significant
adverse impact on some key Grocery categories in the quarter; for
example, the Gravy and Stocks category declined 13% in volume terms
and the Desserts category decreased by 9%. Consequently, Grocery
branded sales in the quarter were materially lower than expected at
(9.5%).
Gavin Darby, Chief Executive Officer
"We are disappointed that our Grocery business reported
materially lower sales in the quarter due to warmer weather;
particularly in September. However, our Sweet Treats and
International businesses continued to demonstrate their strong
momentum, delivering against our strategic priorities and growing
over 6% and 13% respectively."
"We remain very confident in our strategic progress, our
customer relationships are strong and we have an extensive new
product innovation programme planned for the balance of the year.
We expect Group sales to grow between 2-4% in the second half of
the year and our profit expectations for the full year remain
unchanged."
Trading commentary
Grocery sales were (9.5%) lower than the prior year in the
quarter and declined (4.0%) in the first half. While this overall
performance was disappointing, the Grocery innovation programme in
the first half has been well received, particularly the Ambrosia
Deluxe range and a number of exciting new initiatives across a
number of brands will be launched to market in the second half of
the year. Grocery non-branded sales increased in the quarter due to
higher business to business volumes.
Sweet Treats demonstrated accelerating momentum, reporting a
sixth consecutive quarter of growth at 6.4%, as both the branded
and non-branded businesses delivered increases from new products
and new business wins respectively. Cadbury cake Amaze Bites
continues to perform well in its first year and Cake on the Go
distribution is building. New contracts from non-branded cake have
come from a broad customer base, in both seasonal and all year
round product ranges.
The International business also continues to make good progress;
sales grew over 13% in the period and Cadbury cake ranges were
launched in the United Arab Emirates for the first time towards the
end of the quarter.
Q2 H1
Sales % Grocery Sweet Group Grocery Sweet Group
change Treats Treats
Branded (12.4%) 5.1% (7.9%) (5.9%) 2.7% (3.7%)
Non-branded 8.8% 12.9% 10.1% 8.6% 12.5% 9.8%
-------- -------- ------- -------- -------- -------
Total (9.5%) 6.4% (5.4%) (4.0%) 4.1% (1.8%)
Outlook
The Group remains confident that it is making good progress on
its strategic priorities. It has an extensive new product
innovation programme, its customer relationships are strong and it
has demonstrated an ability to deliver cost efficiencies. Sales
growth in the second half of FY16/17 is expected to be weighted to
the fourth quarter and in the range of 2-4%, noting that as always,
the outturn will be partly dependent on average seasonal
temperatures. In the full year, sales are now expected to grow 1-2%
and the Group's medium term target of 2-4% sales growth is
unchanged. Profit expectations for the full year are unchanged,
with this year's consumer marketing costs now expected to be
broadly in line with last year's. The Group's expectation for Net
debt at the full year is also unchanged, with cash generation
weighted to the second half of the year reflecting the business's
seasonality.
Ends
For further information, please contact:
Institutional investors and analysts:
Alastair Murray, Chief
Financial Officer +44 (0) 1727 815 850
Richard Godden, Head of
Investor Relations +44 (0) 1727 815 850
Media enquiries:
Richard Johnson, Corporate
Affairs Director +44 (0) 1727 815 850
Marisa Fitch, Head of External
Affairs +44 (0) 1727 815 850
Maitland +44 (0) 20 7379 5151
Kate O'Neill
Tom Eckersley
Premier Foods will announce its Interim results for the 26 weeks
ended 1(st) October 2016 on 15(th) November 2016.
Notes to editors:
1. All sales disclosures are for the thirteen weeks to 1 October
2016 or 3 October 2015 as appropriate.
2. All disclosures and statements above are unaudited and subject to review.
3. FY15/16 Q2 and H1 sales are stated on a pro forma basis and
are re-stated as if the Company owned the recently acquired
Knighton Foods for the comparative period.
4. In line with previous disclosures and accounting standards,
due to its size, segmental results of the International business
unit are aggregated within the Grocery business unit.
Certain statements in this trading update are forward looking
statements. By their nature, forward looking statements involve a
number of risks, uncertainties or assumptions that could cause
actual results or events to differ materially from those expressed
or implied by those statements. Forward looking statements
regarding past trends or activities should not be taken as
representation that such trends or activities will continue in the
future. Accordingly, undue reliance should not be placed on forward
looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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