An employee holds up a box of Mr Kipling Bramley Apple pies at a production site.  2100x1400

Source: Premier Foods

Mr Kipling is among the brands in Premier Foods manufacturing portfolio

Premier Foods has reported double-digit increases in revenue and profit, with full-year market share gains as well as a return to volume growth in its fourth quarter.

In its preliminary results for the 52 weeks ended 30 March 2024, the manufacturer – which produces bakery brands Mr Kipling and Cadbury cakes among its wider portfolio – posted overall sales of £1.1bn, marking a 15.1% improvement from the previous financial year.

Branded revenue, including for the likes of Ambrosia, Bisto, and Batchelors, contributed £958.1m of this total (up by 13.5% from FY23), while non-branded sales rose by more than a quarter (25.2%) to hit £164.5m. Trading profit at Premier Foods leapt 14% to £179.5m, while margin staying roughly the same at 16%.

“This has been another really strong year for the business with considerable progress across all our key financial metrics and five pillar growth strategy,” stated CEO Alex Whitehouse.

“In the UK, branded revenue increased by 13.6%, accompanied by 29 basis points of market share gain, as we continued to outperform the market. Our brands continue to demonstrate their relevance to consumers,” he added.

Icing on the cake

Looking at its sweet treat division, sales growth of Mr Kipling and Cadbury cakes helped lift branded revenue to £217.7m, up by 4.2% compared to the year prior.

Revenue growth of non-branded sweet treats was more prolific once again, soaring by 36.9% to reach £69.4m, said to be due to a combination of contract wins in pies and tarts and price increases on existing ranges.

Divisional contribution from sweet treats increased to £33.7m and margins jumped by 11.7%, a 130 basis point improvement on the prior year, which it said reflected volume recovery assisted by sharper promotional pricing.

Premier Foods noted the growth for Mr Kipling reflected activity commemorating the King’s Coronation last May, impactful instore brand activation to assist shoppers navigate the cake category with greater ease, and a strong promotional campaign in partnership with the Minions franchise.

Brand investment in Mr Kipling had also been made through broadcasts of the ‘Piano’ advert, while new products launched during the year included Mr Kipling ‘Best Ever’ Signature mince pies (which saw the company enjoy its ‘biggest ever Christmas’) as well as Bakewell tarts and chequered cakes. Its Signature Brownie Bites range was also said to have performed well.

Close up of sugar dusted mince pies

Source: Premier Foods

Mr Kipling ‘Best Ever’ Signature mince pies

As a result of lower levels of input cost inflation in the second half of the year, the business increased its investment in promotional pricing, which it noted assisted in its volume recovery of Mr Kipling products.

Premier Foods saw revenue from its Cadbury cake range grow strongly in the second half. It said this was partly due to lapping a softer comparative period and also to impactful instore brand activation and the relaunch of Crème Egg cake bars.

The Mr Kipling and Cadbury cake brands delivered further retail sales growth in Australia, reaching a combined record market share of 16.1% during the year. Distribution of the Mr Kipling range expanded in the US to more than 3,000 stores, up from around 200 at the start of the year.

Doubling down on brands

Premier Foods expressed an enhanced focus on growing its brands in announcing the exit from the frozen pizza base category and the planned closure of its Charnwood site this July.

Whitehouse noted that the company was continuing to invest in its existing manufacturing sites, with capex stepping up as planned to £33m to help drive efficiencies and facilitate growth through product innovation.

He also expressed delight for the acquisition of breakfast brand Fuel10k last October, which he revealed was now fully integrated into the core business and “performing very well” with “exciting future plans”.

The CEO concluded by saying that with return to volume growth, Premier Foods was on track to deliver on full year expectations.