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Trading statements

Premier Foods warns on FY 2016/17 trading profits

18 January 2017 09:18

Premier Foods said sales in its Q3 were weaker than expected despite a strong December, and has warned on its FY 2016/17 trading profit.

Q3 group sales were £251.4m, (1.0%) lower than the same period last year. Branded sales were (3.8%) lower, while Non-branded sales performed strongly, ahead +11.6%. Group volumes increased +3.4% in the quarter.

"We now expect category performance to remain challenging during the fourth quarter and as a result sales will be below previous expectations," said CEO Gavin Darby.

"Additionally, recovery of significant input cost inflation in certain areas is taking longer than originally foreseen. Consequently, we now expect Trading Profit for FY 2016/17 to be approximately 10% below previous expectations.

"Six out of eight of our major brands gained volume and value market share in the quarter although our categories were generally softer due to changes in retailer promotion strategies. Our International business delivered a ninth consecutive quarter of growth, up 15%.

"Against the backdrop of these headwinds, we are today initiating a new cost saving and efficiency programme which will deliver £10m from 2017/18 with equivalent further savings the following year.

"This programme will support the Company's twin goals of delivering Trading profit and free cash flow while investing in innovation and consumer marketing."

Premier Foods said net debt as of 1 April 2017 was expected to be about £525m.

HIGHLIGHTS:

- Weak Q3 Group sales down (1.0%), despite strong December up +4.5%

- Trading profit expectations for the year approximately 10% lower than previously anticipated

- Majority of major brands grew volumes and market share in Q3

- New cost savings and efficiency programme to deliver £10m from FY17/18

- First new products from Nissin partnership to launch in Q4.

At 9:18am:

(LON:PFD) Premier Foods PLC share price was -7.37p at 40.63p

Story provided by StockMarketWire.com

Related Company: PFD

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