Premier Foods looks set to meet its full year profit expectations despite a difficult economic and trading environment. Sales for the Baking & Milling division are approximately 16% ahead year on year for the first half, mainly driven by price increases across its bread and flour range. The company’s trading update also highlighted an increase in group sales by 7% and Hovis’ rejuvenation.The update for the half year ending 28 June 2008 also revealed the group trading profit is in line with the first half of 2007, due to the achievement of price rises to recover cost inflation.
Premier Foods’ unaudited net debt stands at £1.82 bn, “reflecting the seasonality of the business”. However it expects net debt to fall over the second half.
“The integration of Campbell’s and RHM is proceeding ahead of its original schedule,” said chief executive, Robert Schofield.
“Our manufacturing rationalisation programme is progressing well with the closure of the Bristol and Droylsden factories in June. We have now closed five out of the nine factories scheduled to close through this programme with the remaining four to close over the second half of the year.”
Premier Foods also made efforts to safeguard against rising commodity prices. “We have good forward sight of inflationary pressures and have plans in place to mitigate them as they occur,” added Schofield.
“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.”