Premier Foods, maker of Mr Kipling cakes and Bisto gravy, said on Tuesday that trading profit was set to jump at least 12 per cent for the year to March after consumers stuck at home turned to its familiar brands.
Premier, which had been battling activist investors, said the three months to the end of 2020 were “another exceptional quarter of trading”, with sales of its branded products up 16 per cent in the first three quarters of its financial year.
The sales bump helped the FTSE 250 group to launch TV advertising campaigns for some of its brands, including new low-sugar versions of Sharwood’s stir fry sauces. Sales of the Sharwood’s brand were up 40 per cent in the quarter compared to a year earlier.
Mr Kipling cakes were on track for a record year, while Ambrosia rice puddings and custard also pushed up sales.
“Out of home eating is likely to remain heavily restricted and we therefore expect to see continued high levels of consumer demand for our products,” said Alex Whitehouse, chief executive.
He said trading profit would be £145m to £150m in the year to March 2021 and the ratio of net debt to earnings before interest, tax, depreciation and amortisation was set to fall below two times.
The company had faced pressure from two activist investors, Paulson & Co and Hong Kong-based hedge fund Oasis, but earlier this month announced that a representative of Paulson had quit its board as the group cut its shareholding.
Premier “is clearly enjoying a good war,” said Martin Deboo, analyst at Jefferies. “However, this is more than just a bubble economy, with the group gaining both volume and value share during the quarter, according to independent retail auditors IRI.”