Premier Foods hails ‘strong’ sales and forecasts profits will hit top end of expectations

Oxo-owner Premier Foods appeared to shrug off concerns over rising raw material and ingredients costs on Friday as it forecast full-year profits to come in at the top end of expectations.

The FTSE 250 firm, behind store-cupboard staples Mr Kipling and Ambrosia, smashed through sales targets in the 13 weeks to early July, with revenues up 6.3% on those seen in the same period pre-pandemic in 2019.

Online sales were nearly double 2019 levels, and the firm said its healthy ranges saw accelerated growth as Britons continue focus on wellness in the Covid era.

The firm reported a statutory pre-tax profit up 129% to £122.8 million for the year to April 3, with revenues up 10.3% on the prior year to £934 million. ​

Today bosses said that, as expected, Q1 revenues were down on the same period last year when Britons stockpiled in the first lockdown. Q1 2021 sales came in down 13% on the same period in 2020.

The firm has paid down debts over the past year, including by using £37.3 million garnered from the sale of its 49% stake in bread maker Hovis.

Chief executive, Alex Whitehouse, hailed the "strong trading momentum" and said: "We now expect to deliver adjusted profit before tax at the top end of our expectations for FY21/22.”

Consumer goods giant Unilever yesterday warned that rising costs for raw materials such as palm oil - which is seeing prices up 70% - is putting pressure on profit margins. But Premier made no mention of any impact from this inflation in its trading update.

Analysts at Jefferies noted the Unilever downgrade, and said: "The absence of any call-out on commodities in the update, plus confident guidance, suggests that Premier have things under control."

They added: "The inference, behind all the COVID ups and downs, is that Premier are continuing to assemble their lean, mean, fighting machine." ​

Premier Foods shares rose 3.6% on Friday morning.