Premier Foods uses its loaf

The strong performance last year was driven by group's branded products, which saw sales climb 6.5 per cent to £1.7bn and gain an aggregate 50 basis points of market share. Mr Schofield said that, having spent several years acquiring neglected brands and integrating these acquisitions, Premier was now in the organic growth phase of development and would get "back to basics" in managing its brand portfolio.

Although Premier's strategy remains unchanged, it detailed how the group planned to push growth of its key 'drive' brands, such as star-performer Hovis, which saw sales climb 15.2 per cent to £349m over the year. Mr Schofield pointed to Hovis as an example of the group's strategy in action. "We took over a Hovis brand that was ailing and losing brand share. It took as a year after ownership to fix the brand," said Mr Schofield, pointing to improvements to the product and the range, and the use of high profile advertising to re-ignite the relationship with consumers.

However, the focus on driving its brands did lead to a slip in the non-branded segment, where the lower pricing of branded products saw consumers "shopping out" of own brands. That trend was particularly distinct in the bread category where gains made by Hovis meant a 16.5 per cent drop in Premier's own-brand bread sales. "Brands have won in the marketplace and retailer own-label brands have gone backwards," said Mr Schofield, although he emphasised the importance of own-label in maintaining retailer relationships.

Prior to these results, broker RBS expected underlying 2010 pre-tax profits of £190m and EPS of 5.7p (from £168m and 5.8p in 2009).

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