* H1 trading profit up 50 pct to 47.4 million pounds
* Shares up 6.5 pct
By Neil Maidment
LONDON, July 23 Premier Foods, the maker
of Mr Kipling cakes and Hovis bread, said it expected full-year
results to be at the top end of forecasts after cost cuts helped
the group to report a 50 percent leap in first-half trading
The British food producer also said on Tuesday it expected
full-year free cash flow to be between 50 and 70 million pounds,
slightly higher than earlier estimates, which would help reduce
year-end net debt to 840-860 million pounds ($1.32 billion) from
890 mln at the end of June.
Shares in the firm rose 6.5 percent to 90.7 pence in early
"This is a great result for Premier, make no mistake,"
Investec analyst Martin Deboo said, describing the first-half
result as very strong.
After refinancing and selling assets last year to help
reduce debt built up before the financial crisis, Premier Foods
is stepping up marketing for its eight best-selling brands, such
as Batchelors, Ambrosia and Bisto gravy. It is also shaking up
its bread unit to improve profitability.
"A 50 percent increase in trading profit is a very
encouraging result given the highly competitive environment,"
Chief Executive Gavin Darby said.
The group said the restructuring of its bread division was
ahead of plan. At a cost of 28 million pounds, the shake-up
includes bakery closures and job cuts to reduce capacity.
Group underlying trading profit jumped to 47.4 million
pounds in the six months to June 30, Premier Foods said,
benefiting from cost savings made last year and another 20
million pounds worth delivered in the period.
The firm said plans to halve its 3,299 suppliers would
deliver a further 10 million pounds of savings in the second
half of the year and help push annual trading profit to around
146 million pounds - the top of market expectations.
Total underlying sales fell 0.9 percent, with a 3.2 percent
rise in best-selling brands offset by a 5.1 percent fall in