Packaged grocery producer Premier Foods (PFD) surprised the market by raising its earnings outlook. For the year to March 2026, the firm now sees profit at the top end of expectations.
| Share price: 180.2p (+6.5%) | PE: 12x |
| Market cap: £1.56bn | Yield: 1.7% |
BRAND POWER
For the 13 weeks to 27 December, Premier’s group revenue increased 4.1% while branded revenue increased 5.2%. The firm recorded market share gains in both Grocery, up 5.8%, and Sweet Treats Branded, up 3.1%.
Meanwhile, revenue from New Categories increased by an impressive 29% and acquired brands delivered double-digit growth. As a result, trading profit is now seen at the upper end of market forecasts.
According to the company-compiled consensus, analysts are forecasting trading profit of between £193 million and £198 million. The top end of the range would represent an increase of around £10 million or 5% on FY25.
‘These results demonstrate strong delivery against all pillars of our strategy, with consumers continuing to choose our brands for their quality and value’, said CEO Alex Whitehouse.
‘Our portfolio of brands offer consumers great options (and) firmly underpins confidence in our medium-term prospects’, added Whitehouse.
Judging by Premier’s share price performance over the last six months, expectations for FY26 were fairly low. However, the company’s brands have proved themselves resilient with sales growth actually accelerating from the previous quarter.
Classic products like Angel Delight, Oxo and Paxo are being jazzed up with new variations. Meanwhile, premium ranges such as Ambrosia Deluxe, Mr Kipling Signature and The Spice Tailor are outperforming as consumers trade up.
It seems we’re getting more adventurous in our shopping, with New Category sales up 29% led by granola and yoghurt. And recently-acquired Merchant Gourmet also had a strong quarter with revenue up 18%.
It says something when ‘heritage’ brands and new ranges can hold their own against the supermarkets’ own premium ranges. It also raises questions for us over why Associated British Foods’ (ABF) branded grocery performance has been so lacklustre.
Read the press release here: https://www.premierfoods.co.uk/investors/
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