Mr Kipling owner Premier Foods boosts sales as shoppers stockpile sweet treats
Shares in Premier Foods jumped almost 25 per cent in early trading today after the firm said it had experienced a sharp rise in demand during the coronavirus outbreak.
The Mr Kipling maker said it expected sales to rise roughly 3.6 per cent year on year in the fourth quarter and 10.5 per cent in March.
This was largely fuelled by increased demand during the pandemic from British customers, with UK sales up 7.3 per cent and 15.1 per cent in the fourth quarter and March respectively.
As a result, Premier Foods said it now expected full-year profit to come in at the top end of market expectations.
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“Volumes have started to reduce from the exceptional levels seen in March, although are still expected to continue to be higher than average patterns of demand,” the firm said.
“This reflects more meals being eaten at home than usual due to recent measures set out by HM Government and hence increased demand for the group’s product ranges.”
Premier Foods today said it had also agreed a segregated merger of all its pension schemes — a move it said would save roughly £4m per year.
The St Albans-based company said the merger could also reduce its annual cash deficit contribution by as much as £21m from 2023.
“The segregated merger of the company’s pensions schemes we are announcing today represents a ground-breaking agreement which is set to unlock benefits and value for all stakeholders in the company,” said chairman Colin Day.
Premier Foods said it expected to report cash on deposit of more than £175m at the end of the year after it drew down £85m of its £176.6m committed revolving credit facility.