Strategy for RHM revealed

13 July, 2007
Page 4 
Oxo-to-Branston owner Premier Foods this week revealed its plans for RHM's bakeries, following its acquisition of the food-to-milling group last December.
In the cakes division, Manor Bakeries will be integrated into Premier's operations in St Albans. And RHM's Avana Cakes will be integrated into the RHM's RF Brookes business, due to their common supply chain and customer base.The cakes division head office in Windsor will close in the first half of 2008. And cakes' van sales operation is to close in the second half of the year, due to the high costs in servicing customers, it said.Sales for the cakes division since acquisition were expected to be ahead of the comparable periods in 2006, with a particularly strong performance by Mr Kipling, it added, following a trading update for the six months to 30 June. Gwyn Tyley, director of investor relations, told British Baker that its bread bakeries would continue to operate as a separate division.A "long-term strategic question" hung over the milling division, he admitted, as Rank Hovis produced more flour than the bakeries used. "This is something we need to review in the long term, but we won't get to it for a long time," he said. Premier said that in the bread bakeries division, sales and trading profit since acquisition were anti-cipated to be lower than the comparable period in 2006, impacted by increases in wheat prices and competitors' promotions.It said it plans to recover further increases in wheat prices since February through bread price rises in the weeks ahead. And it also revealed plans for TV advertising for Hovis 'Best of Both' bread and the launch of a new seeded Hovis loaf, starting shortly.



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