- Total market share gains of over 1.2 per cent
- International progress
Premier Foods (PFD) has reported its “biggest ever Christmas” as the Mr Kipling maker posted double-digit growth across divisions and made significant market share gains in its third quarter to 30 December.
Total revenue was up 14.4 per cent to £353mn as shoppers snapped up festive items such as gravy and mince pies. Lower promotional prices in the period "positively impacted performance", according to chief executive Alex Whitehouse, and prices will be cut on products including Loyd Grossman cooking sauces and Mr Kipling bakewell slices in the fourth quarter.
Grocery revenue rose by 11.9 per cent as seasoning items such as Bisto gravy and Oxo stock pots enjoyed a Christmas boon. Encouragingly, share gains came in at over 110 basis points and revenue from new categories almost doubled.
Growth was stronger at the much smaller sweet treats division. Revenue climbed 21.3 per cent, driven by a Cadbury cake sales uplift after unscheduled maintenance of a plant line last year. The division gained over 120 basis points of share as 4mn more mince pies were sold than last time around.
The company continues to make progress in international markets, from Ireland to the US, with further overseas penetration a key part of management's strategy. International sales were up 11 per cent in the period on a constant currency basis as distribution gains aided Sharwood’s cooking sauces and The Spice Tailor meal kits. In North America, Mr Kipling cakes are now listed in almost 3,000 stores.
Management maintained its full-year profit guidance, which it upgraded in November when it guided for trading profits to be around 10 per cent higher than the £158mn posted in the previous year. A valuation of 10 times forward consensus earnings, while above the five-year average of eight times, isn't overly demanding.
Last IC view: Buy, 132p, 17 Nov 2023
