Yahoo Finance Premier Foods hails return to form as squeezed consumers eat in
Mr Kipling cake maker Premier Foods has racked up its highest sales growth for five years, bolstered by squeezed consumers opting to eat at home.
The group behind Angel Delight and Batchelors Super Noodles rang up a 3.6pc rise in revenues to £819.2m for the year ending in March.
That was underpinned by its tie-ups with food groups Nissin and Mondelez International, which accounted for 55pc of the sales growth.
Pre-tax profits soared 74.2pc to £20.9m as international revenues climbed by a quarter to £61m. It enjoyed an 81pc sales jump in Australia, where it became the number-one and two player in the cake market.
Investors sent shares up 3pc to 39p in the lunchtime trade, as the firm confirmed it had shaved down its hefty debt pile by £27m to £496.4m.
Chief executive Gavin Darby said Premier had outstripped expectations and brought forward its next net debt target by nearly a year.
He said food manufacturers were enjoying a boost from consumers eating in, rather than splashing out on clothes and restaurant meals.
“The food industry is very resilient at the moment. Volumes and revenue are heading in a good direction," Mr Darby said.
“Non-food is in decline, hence the pain we are seeing with some non-food retailers.
“When consumer confidence is lower, they pull back somewhat and they eat more in the house, and eat less out of the home. That is great for food companies.”
Sales in Premier's grocery business rose 4.6pc to £589.2m, with its sweet treats arm - which include Cadbury’s cakes made under licence - climbing 1.2pc at £230m.
Angel Delight on-the-go pots boosted sales by 11pc, while Loyd Grossman sauces rose 3pc in the second half of the year.
The development of Super Noodle pots with Nissin helped arrest the decline of the Batchelors brand and transform it into one of the group's fastest growth areas.
Mr Darby said the partnership with Nissin would strengthen its expansion into overseas markets.
He said: “Nissin own nearly 20pc of the company. The focus for me is on growing their brands and our brands with their technology.
"We will over time collaborate in our international business, I suspect."
Premier Foods, which has around 4,000 staff across 15 UK sites, saw operating profit lift 12.7pc to £69.3m. It came as the firm trimmed restructuring costs to £8.5m, down from £15.8m the year before.
