Sales surge at Mr Kipling maker as shoppers stock up on store-cupboard items

Mr Kipling maker Premier Foods has seen sales jump in recent weeks as the coronavirus outbreak has driven demand for store-cupboard items.

The food group, which also makes Ambrosia and Bisto, said UK sales jumped by around 15.1% in March, with UK sales for the three months to the end of March rising 7.3%.

Premier Foods made the announcement as it also revealed a major shake-up of its pension schemes, following a year-long strategic review at the business.

It said this will involve a merger of its three separate pension schemes and will reduce the cash contributions from the group, as Premier looks to save money.

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The debt-laden business has come under fire from activist investors in recent years, resulting in a leadership shake-up last year.

Premier Foods said that during “this challenging time” its manufacturing and distribution are working at “maximum capacity” and demand continues to be high.

It said it has therefore given each factory worker two additional days of annual leave and a £250 cash bonus.

The company added: “Volumes have started to reduce from the exceptional levels seen in March, although are still expected to continue to be higher than average patterns of demand.

“This reflects more meals being eaten at home than usual due to recent measures set out by the Government, and hence increased demand for the group’s product ranges.”

It comes on the back of surging supermarket sales over the past month, as shoppers have stocked up on essentials.

Premier said it now expects to post a trading profit for the year ending March 28 at the “top end of market expectations” following a strong March period.

Russ Mould, investment director at AJ Bell, said: “The market has been waiting for this news for a long time, hence why its share price has rocketed on the announcement.

“However, this won’t be an easy win for Premier Foods. There is intense competition from private label suppliers and rival brands, and near-term it faces the challenge of likely subdued consumer spending if the country goes through a difficult recession.”

Shares in the company leapt 16.9% to 38.2p in early trading on Monday.