LONDON, July 22 Premier Foods, the
British maker of Mr Kipling cakes and Bisto gravy, posted a 2.1
percent rise in first half trading profit, though its sales
fell, reflecting a tough market for its supermarket customers.
The company, which last month cut annual sales growth
forecasts at its key brands due to Britain's gloomy grocery
market, said on Tuesday it was maintaining its trading profit
expectations for the full year.
Premier Foods' underlying trading profit for the six months
to June 30 was 48.1 million pounds ($82.1 million), up from 47.1
million pounds in the same period last year.
But its sales fell 6.1 percent to 364.4 million pounds, with
its core higher-margin 'power brands' such Bisto, Mr Kipling,
Batchelors soup and Ambrosia custard, down 4.9 percent to 240.8
Lower volumes were offset in part by a raft of cuts to
manufacturing and procurement costs.
The retailers who sell Premier Foods products are facing the
slowest rate of growth in Britain's grocery market since 2005,
illustrated by a profit warning from market leader Tesco
"We are adapting quickly to the changing external
environment through retaining a tight control of costs and
margins and have a strong programme of consumer marketing and
new product introductions planned for the second half of the
year," said Chief Executive Gavin Darby.
"Assuming normal weather patterns, we expect an improved
second half branded sales performance and our trading profit
expectations for the year remain unchanged."
Darby added the firm remained convinced of the medium and
long-term potential for its brands to deliver profitable growth.
Shares in the firm closed at 46.5 pence on Monday, down 14
percent on a year ago, valuing the group at 383 million pounds.
($1 = 0.5856 British Pounds)
(Reporting by Neil Maidment; Editing by James Davey)