Food inflation, weak sterling and promotions from retailers led to a "challenging" year for Premier Foods (PFD). Underlying full-year sales were down 1.4 per cent to £790m and warmer weather proved particularly difficult for the grocery division, where underlying sales fell 2.6 per cent to £563m due to lack of demand for some of its key products, such as soups and gravies.
The group said it would take a "blended approach" to managing price increases brought about by higher ingredients prices and weak sterling, but added that putting the price hikes through has taken longer than expected as retailers continue with promotions. A cost-cutting programme is also on its way, aiming to deliver around £20m of savings over the next two years. This will see warehousing and distribution of the grocery and sweet treats divisions consolidated to one location, and job cuts at the head office.
Analysts at Shore Capital expect adjusted pre-tax profits of £74.2m for the year ending April 2018, giving EPS of 7.2p, essentially flat on their estimates from FY2017.
PREMIER FOODS (PFD) | ||||
---|---|---|---|---|
ORD PRICE: | 42p | MARKET VALUE: | £352m | |
TOUCH: | 42.25-42.5p | 12-MONTH HIGH: | 57p | LOW: 35.25p |
DIVIDEND YIELD: | nil | PE RATIO: | 60 | |
NET ASSET VALUE: | 95p* | NET DEBT: | 66% |
Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2012 | 1,070 | -8.0 | 28.2 | nil |
2013 | 840 | 4.4 | -12.8 | nil |
Year to 1 Apr | Turnover (£m) | Pre-tax Profit (£m) | Earnings per share (p) | Dividend per share (p) |
2015** | 960 | -136 | -12.7 | nil |
2016 | 772 | -13.0 | 4.1 | nil |
2017 | 790 | 12.0 | 0.7 | nil |
% change | +2 | - | - | - |
Ex-div: na Payment: na *Includes intangible assets of £1.11bn, or 134p a share **15-month period |