Premier Foods’ interim management statement has revealed sales of Hovis are up 11% for the four months to October. According to the company, consumer response to the relaunch of its Hovis brand has been positive, and market share in October has improved, “despite intense promotional activity by some of our competitors”.In the statement for the 17 weeks ended 25 October 2008, the company said its group trading profit was “in line with expectations”, with group sales up 9% for the four months to October and up 8% for the year to date.
However, the company is undergoing an ongoing review of its capital structure, which includes continuing discussions with lending banks, in order to “accelerate the reduction of Group debt”. The discussions are expected to continue into the first quarter of 2009 and the decision has also been made not to pay the 2008 interim dividend.
Chairman David Kappler said that Premier would “consider the future dividend policy as part of the long term capital structure review”, but added: “It is the Board’s intention to resume dividend payments when debt levels permit.”
“Premier and the lending banks have agreed that, with the review ongoing, it would be appropriate to defer the date of the next covenant test from 31 December 2008 to 31 March 2009,” said Kappler.
It has recently been reported that United Biscuits (UBUK) made a secret £250m bid for the Premier Foods brand, Mr Kipling, which is thought to have been rejected.
Premier said its sales expectations for full year remain unchanged.