LONDON, April 24 Premier Foods, the
British maker of Mr Kipling cakes and Bisto gravy, said a tough
grocery market and the later timing of Easter had hit sales in
its first quarter.
The firm said, as it expected, total sales in the three
months to March 31 fell 6.2 percent to 186.3 million pounds
($314 million) with sales of its eight key grocery brands, which
as well as Mr Kipling and Bisto include Batchelors and Ambrosia,
down 3.5 percent.
Sales of support brands slumped 10.4 percent mainly due to
lower Cadbury cake sales as a result of Easter falling in the
company's second quarter this year, while non-branded sales fell
12.9 percent as the group puts more focus on branded products.
"Our expectations for the full year are unchanged," Premier
Foods chief executive Gavin Darby said in a statement.
"While trading conditions are expected to remain
challenging.. we have a strong programme of new product launches
and consumer marketing planned for the second half of the year."
Retailers are facing the slowest rate of growth in Britain's
grocery market since 2005, illustrated by tough trading at UK
supermarkets like Tesco and Morrisons.
After a costly acquisition spree, Premier Foods has spent
the past few years selling assets, reshaping its business and
cutting costs to help reduce debt, pinning its prospects on
growing a streamlined group of high-margin grocery brands.
Last month, the firm unveiled a 1.13 billion pound
refinancing package designed to reduce its borrowings, and also
struck a new pensions agreement.
The deal follows a decision in January to hand control of
its struggling Hovis bread business to U.S. investment firm The
Gores Group. Premier Foods said the deal would allow for greater
investment in the division, and free-up its focus on groceries.
Shares in Premier Foods closed at 63.50 pence on Wednesday,
up 31 percent on a year ago, valuing the group at 524 million
($1 = 0.5960 British Pounds)
(Reporting by Neil Maidment; editing by James Davey)