Premier Foods saw its shares jump to a 12-month high as news of its chief executive's retirement outweighed a mediocre first-quarter trading update. We think the company is on a recovery path and still rate the shares a buy.
City analysts blame Robert Schofield, chief executive since 2002, for the ambitious expansion that saw Premier over-extend itself to buy up leading food brands. They give finance director Jim Smart much of the credit for the recent financial turnaround.
Group sales were down 3.1 per cent after weak trading in January and February, but Premier's bosses have seen a recovery in March, which, they believe, is a better indicator of the likely outcome for the rest of the year. Price increases to cover raw material inflation had only been implemented in March, which will also hit first-half profits.
When: 25 Feb 2011
Price: 28p
Performance to date: +25%
