Mr Kipling firm Premier Foods hikes profit outlook as sales surge

Mr Kipling cake firm Premier Foods has increased its annual profit outlook as sales growth remains in double digits thanks to a strong performance in its grocery arm.
By Greg Wright
Published 7th Mar 2023, 08:55 BST

The group, which makes a raft of well-known brands such as Oxo cubes and Bisto, said it is on track for sales in its fourth quarter to be at least 10 per cent higher than a year ago.

This is putting it on track to beat earnings expectations, with underlying pre-tax profits set to be around £135m over the year to April 1, which will be about 10 per cent higher than in 2021-22, according to the firm.

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Trading profit is expected at around £155m, up from £141.2m the previous year. The group said its grocery business “continues to lead the way, with broad-based growth and further market share gains”.

Mr Kipling cake firm Premier Foods has hiked its annual profit outlook as sales growth remains in double digits thanks to a strong performance in its grocery arm.Mr Kipling cake firm Premier Foods has hiked its annual profit outlook as sales growth remains in double digits thanks to a strong performance in its grocery arm.
Mr Kipling cake firm Premier Foods has hiked its annual profit outlook as sales growth remains in double digits thanks to a strong performance in its grocery arm.

It also said its sweet treats division was showing an “improving trend” while the international business is set to post another quarter of strong sales growth.

The update comes less than two months after Premier Foods said sales rose 12 per cent in its third quarter to the end of December as it offset soaring costs with annual price rises and cost savings. Grocery sales jumped 17.4 per cent over the third quarter, with branded sales up 15.5 per cent.

It also revealed at the time that it was planning to close its factory in Knighton, Staffordshire, in a move affecting about 300 jobs. The firm said the site was “marginally” loss-making. Premier – which also has brands such as Ambrosia, Batchelors and Sharwood’s – has 15 factories across the UK and employs 4,000 people.

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Speaking last year, Premier Foods’ chief executive Alex Whitehouse said that raising prices was a “last resort” for the business.

In a trading update published in November, Premier Foods said its sales grew in the first half of the year, as more consumers opted to stay in rather than eat out.

Premier Foods previously said that its cooking sauces like Loyd Grossman and Sharwood’s had performed particularly well in 2022.

Premier Foods bought meal kit brand The Spice Tailor for £43.8m last year as the consumer group aimed to take advantage of the boom in home cooking.

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The company said the deal would help to expand its ethnic food business, particularly in Australia which is The Spice Tailor’s second largest market after the UK.

At the time Premier Foods said the home cooking brand was expected to generate revenue of £17.3m in the 2022/23 financial year, and was forecast to grow over the coming years.

The group also announced that it will release its preliminary results for the 52 weeks ended April 1 2023 on May 18 2023, which will provide more details on its trading performance.