Premier Foods posted a stronger annual profit and raised its dividend payout on Thursday as the company offset higher input costs with price hikes and cost-cutting measures initiated in the last quarter of the year.
Britain's grocery sector had come under pressure from elevated costs and supply disruptions, but food prices are currently expected to stabilise in the coming months and next year.
"We are continuing to see consumers looking for convenient, affordable and tasty meal solutions. Batchelors and Nissin were two of our best branded performers in the year that benefited from this trend," CEO Alex Whitehouse said in a statement.
The maker of Mr Kipling cakes and OXO cubes reported a 13% jump in adjusted profit before tax for the year ended 1 April to £137.2 million ($173.16 million), while analysts on average had forecast £135 million.
The company raised its dividend for the year to 1.44 pence and retained its 2024 fiscal outlook.
Premier Foods increased its annual profit outlook on 7 March, as its grocery business witnesses strong demand and performance of its sweet treats segment improves in the fourth quarter, sending shares of the company up 9%.
The company noted that shoppers are likely to pay even more for groceries this year than they did in 2022, with grocery inflation hitting a record high of 17.1% in the four weeks to 19 February.