Ambrosia owner Premier Foods’ profits were boosted by promotional prices and demand for ice cream
- Premier Foods reported adjusted pre-tax profits grew 15.1% to £157.9m
- The company’s total turnover rose by the same percentage to £1.12 billion
Premier Foods’ profits exceeded expectations last year thanks to price cuts and a surge in the number of customers buying porridge, noodles and ice cream.
The food manufacturer reported that its adjusted pre-tax profit grew 15.1 percent to £157.9 million in the year ended March 30, compared with analyst forecasts of around £153 million.
Total sales rose by the same percentage to £1.12 billion, largely due to rising demand for ‘new categories’ and branded products in the supermarket division.
Tasty brand: Premier’s Ambrosia sales exceeded £100 million for the first time, while sales of porridge pots more than doubled
The surge in trade also follows price cuts on several items as many consumers switch to cheaper alternatives during the cost of living crisis.
Premier cut prices on ranges such as Loyd Grossman cooking sauces and Batchelors Super Noodles in the second half of the period, although it continued to increase prices on its own brand items.
Meanwhile, Ambrosia’s turnover exceeded £100 million for the first time as sales of porridge pots more than doubled, supported by the launch of a new apple and blueberry variant.
Ice cream purchases also rose by more than half, thanks to the expansion of the Angel Delight and Mr Kipling ranges to more retailers.
And Nissin noodles had another banner year, with the Japanese brand’s sales rising by more than 30 percent to almost £50 million.
Following the result, Premier bosses have proposed a 20 per cent increase in the full-year dividend to 1.73 pence per share.
Alex Whitehouse, CEO of Premier Foods, said it was ‘another very strong year for the business, with significant progress across all our key financial metrics.’
The FTSE 250 group has cut its net debt by £38.7 million to £235.6 million, equivalent to 1.2 times adjusted pre-nasties profits, a record low.
Premier has been struggling with enormous pension liabilities for several years, but pension deficit payments have been suspended since April.
The move will boost the company’s cash flow by £33m this financial year, providing further opportunities to increase capital expenditure, dividends and spend on mergers and acquisitions.
Recent acquisitions by the group include Asian food company The Spice Tailor and Scottish breakfast brand Fuel10K, which makes oat products, muffins and muesli.
Premier Foods shares were down 2.8 per cent to 164p by early Thursday afternoon, but have nonetheless grown by around a quarter over the past 12 months.