Premier Foods, parent company of Hovis bread and Mr Kipling cakes, has reported a 6.2% slump in sales in the first quarter of the year.
Total sales in the three months to 31 March declined to £186.3m, while sales of the company’s ‘power brands’ fell 3.5% to £123.7m.
Chief executive Gavin Darby said the subdued grocery market, warmer weather in March, and a later Easter, which shifted the main season for Cadbury cake sales into the second quarter, were all to blame. “Plans are in place to help reverse this decline during the remainder of the year, focusing on new Cadbury product launches,” said Darby.
Mr Kipling would also be relaunched in the third quarter of the year in an attempt to rejuvenate the brand and boost sales, he revealed during a conference call with analysts. The company’s major investment in the new Mr Kipling Snap Pack line at its factory in Barnsley is developing well, Darby said, with production expected to begin early in 2015.
Last month, the company, which nearly sank under the weight of its debts during the recession, announced a £1.13bn refinancing plan aimed at reviving the business. In January, it also announced it had sold a controlling stake in Hovis to American investor The Gores Group.
Darby described the refinancing as “transformational” and said that, together with the Hovis deal, the measures would enable Premier to “focus all our energies on delivering our category growth strategy”.
“While trading conditions are expected to remain challenging for the remainder of the year, we have a strong programme of new product launches and consumer marketing planned for the second half of the year, building on our enhanced customer partnerships with retailers and supported by continuing initiatives to reduce costs, complexity and improve efficiency,” Darby said.