Premier Foods reported lower sales and earnings on Tuesday, citing tough trading conditions, and said it would change its strategy to focus more on cost efficiencies and cash generation.
The maker of Mr Kipling cakes and Bisto gravy said full-year group underlying sales fell 1.4 per cent to £790.4 million ($1.02 billion) in the year ended April 1st.
Adjusted profit before tax fell 11.8 per cent to £74.2 million, and adjusted earnings per share fell 12.2 per cent to 7.2p.
The company warned in January that profit would be 10 per cent lower than previously thought, due to the trouble it was having negotiating price increases with British retailers.
“With the industry changing rapidly, we have updated our strategy to give an equal focus to revenue growth, cost efficiencies and cash generation,” chief executive Gavin Darby said in a statement. The company’s previous strategy had prioritised sales growth.
The company, which also makes Ambrosia custards and Batchelors noodles, said it expects cost savings drives to save £20 million over the next two years, with its net debt-to-Ebitda ratio getting below three times in the next three to four years.
The company said the progress it plans to deliver this fiscal year will be weighted more to the second half of the year.
Premier remains under pressure to deliver growth after rejecting a takeover offer last year from American rival McCormick. Instead of a deal with McCormick, Premier struck a deal with Japanese noodle company Nissin.
– Reuters
