Premier Foods Raises Profit Outlook Again As Lockdown Drives Demand
Premier Foods, the maker of Oxo stock cubes and Bisto gravy, on Tuesday raised its full-year trading profit outlook for the second time as it expects stronger demand for its brands during pandemic-led government restrictions on eating out.
The Mr Kipling cakes maker said trading profit rose 28.7% to £65.8 million pounds ($86.76 million) for the 26 weeks ended 26 September, ahead of a company-supplied consensus of 62 million pounds, as more people cooked at home during the lockdown.
The company had said in June it expected revenue and profit to exceed estimates for the year.
It expects continued revenue growth in the second half, driven by new products, strong commercial plans and increased television marketing, along with higher demand due to the closure of restaurants and pubs for four weeks across England.
"The longevity of this increased demand is likely to be linked to the duration of these new measures," Chief Executive Officer Alex Whitehouse said.
The company, whose Bisto, Batchelors, Oxo, Ambrosia, Sharwood's, McDougall's and Nissin brands all reported double-digit revenue growth for the first half, said it would be launching new products in this range to cash in on the demand.
Jefferies analysts said the company's new medium-term leverage target of 1.5 times its core earnings hinted at a return to paying dividends at some point.