Premier Foods Sticks To FY Profit View As Q3 Revenue Dips
Mr Kipling cakes maker Premier Foods Plc stuck to its full-year profit forecast even though logistics issues and oversupply dented overall sales in the third quarter.
The maker of Bisto gravy and Oxo-cube also named finance chief Alastair Murray as acting chief executive officer, while it searches for a permanent replacement for ousted boss Gavin Darby.
Premier had said in November that Darby would step down on 31 January, after he survived a revolt by activist hedge fund Oasis Management over the company's sliding share price since a proposed takeover fell through two years ago.
Premier Foods also said it was still in talks with third parties to sell its Ambrosia rice pudding and custards brand as it looks to cut more than £500 million (€564.3 million) of debt.
The company faced several issues in the quarter including a higher inventory of Cadbury cake in the Australian supply chain, which pushed down international sales by 27%.
Sales at the lower margin non-branded Sweet Treats unit fell 20.7% in the quarter as "implementation challenges" in its logistics programme affected cake sales volumes, the company said.
Despite those hiccups, the company said that it had grown its market share on average across its categories during the quarter with its three largest brands - Mr Kipling, Bisto and Batchelors - all seeing higher sales.
Premier Foods also said net debt at the end of 2018 is expected to be lower than the prior year, but the rate of debt reduction is expected to be slower as it builds raw material and finished goods stock levels to avoid possible delays at ports as Britain works to strike a deal with the European Union on its impending departure.