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Premier Foods sees shares fall

19 January 2017
Premier Foods sees shares fall

But while branded sales were 3.8% down, non-branded sales were up 11.6%.

The warning reflected in part a dent to sales of Premier Foods' key brands from a change in promotional strategy by the company's key supermarket customers, who have cut multi-buy offers, so cutting demand volumes for these "category" products.

Premier Foods said it expects trading profit to miss expectations by 10 percent and revenue to be less than forecast. It is expected to deliver incremental cost savings of £10m from FY17/18, with equivalent further savings the year after.

Shares in Premier Foods, the manufacturer of high street brands like Mr Kipling cakes, Bisto gravy, and Ambrosia custard, are plummeting on Wednesday after it issued a major profit warning.

And lo, inflation began to wreak havoc on United Kingdom companies.

The pound's fall has pushed up the price in ingredients such as sugar, cocoa and palm oil. Along with other methods of managing the costs, Premier Foods said it is looking at "limited price increases".

Premier Foods plc, the United Kingdom group behind brands including Mr Kipling cakes and Ambrosia custard, today (18 January) warned annual profits could be 10% lower than it expected, in part due to its struggles in passing on Brexit-linked cost increases. Oh, and it's also creating some kind of Batchelors-Pot Noodle tie-up, which will also come to market next month.

Premier Foods PLC on Wednesday said it suffered weak sales in the third quarter of its financial year and warned on increased input costs as a result of the weak pound, leading it to trim its trading profit expectations for the full year.

Premier said: "We are working collaboratively with customers to agree these changes and are confident that appropriate settlements will be reached, although this is taking longer than originally foreseen".

The City had been expecting annual trading profits of around £130 million, down from £131 million a year earlier.