Premier Foods reports positive first-half forecast

25 July, 2008
Page 10 
Premier Foods has said it expects an increase in sales for its Baking & Milling division in the first half of this year.
In a trading statement, Premier said sales would be around 16% ahead year-on-year for the six months to June, driven by price increases. Sales of Hovis, which it bought when it acquired RHM last year, have stabilised, but volume sales are at a lower level than 2007. The company said it was pleased by the response of customers and consumers to the new recipe and packaging for the Hovis white loaf. It plans to rejuvenate the whole Hovis range over the second half of the year.Chief executive Robert Schofield said: "Our expectations for the year remain unchanged, with progress weighted to the second half as the benefits of synergies from the manufacturing rationalisation programme, price increases achieved to date and the rejuvenation of Hovis flow through."Premier said the integration of the Campbell's and RHM divisions was progressing well, with five of the nine factories schedule to close already shut, and the remaining four to close over the second half of this year.The group's trading performance was in line with expectations, with sales up by 7%. The group had addressed input cost inflation by raising prices, it said.In March, Premier said its bread price rise timing and consumer concerns about its Hovis white bread had played a major part in losses of £73.5m in 2007.----=== In Short ===== Co-op to take over Somerfield ==The Co-operative Group and Somerfield have entered into an agreement for the Co-operative Group to acquire Somerfield for £1.565bn.The acquisition is to take place on a cash-free debt-free basis and will result in the combined total of more than 3,000 grocery stores. This will make it the fifth-largest food retailer in the UK, with a market share of approximately 8% and net sales of around £8bn. == Iran bakers fight back ==Seven hundred bakery workers went on strike in Sanandaj, Iran, in a dispute over low pay, according to the National Council of Resistance in Iran. The workers walked out on Saturday 13 July, and more than 450 of them are reported to have signed a petition for action by the government.== Flour shortages take their toll in Africa ==More than 80% of Zimbabwe's bakers have been forced to temporarily close due to flour shortages. The casualties include the country's three largest bakers - Lobels, Bakers and Superbake.== Bakeries for schools ==Schools in the Philippines could see bakeries set up inside their schools after a recent decision by Cebu city government. Ten schools have already been selected for a trial as part of the government's plan to offer school children more nutritious, as well as cheaper, bread.== US firms raise prices ==Food companies in the US are preparing another round of hefty price increases, as soaring commodity costs force them to pass on rises to consumers. Sara Lee, Kraft Foods, Kellogg's, ConAgra and Tyson are among the firms that are pushing through price rises.



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