Premier Foods Ups Profit Forecast Thanks To Growing Sales Of Sauces

Bisto gravy maker Premier Foods has said it forecasts annual profits towards the top end of expectations following solid sales of its branded products.
The food manufacturer said first-quarter sales were 6.3 per cent higher on the same period two years ago as purchases of numerous cooking sauce brands, including Sharwood's, Oxo and Ambrosia all climbed by double-digit percentages.
Cake and pie brand Mr Kipling also performed strongly, growing by 7.5 per cent, which the group attributed to effective advertising campaigns and robust demand for healthier product ranges such as low-sugar Angel Slices.
Pandemic boom: Bisto maker Premier Foods said first-quarter sales were 6.3 per cent higher on the same period two years ago as purchases of cooking sauce brands
Boss Alex Whitehouse said that sales of another healthier product range, Sharwood's low-fat cooking sauces, have risen at twice the rate of Premier's branded portfolio, on account of consumers maintaining their 'recently adopted good healthier eating habits.'
St Albans-based Premier additionally noted the increasingly popularity among customers of Japanese instant noodle brand Nissin, whose sales have soared by more than 160 per cent since 2019. 
A poor performance from its non-branded goods meant the company's overall revenues were 13.2 per cent lower than last year, though, partly because of a weak recovery in its out-of-home divisions.
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Whitehouse added: 'We have made a very encouraging start to the year, with quarter one sales at the top end of our expectations, as our brands again benefited from the introduction of new products and continued marketing.
'When compared to two years ago, our branded sales increased by over 9 per cent, with grocery brands up 12 per cent, continuing the strong momentum of recent years.
Food giant: Premier Foods' brands include Oxo, Ambrosia, Lloyd Grossman and Mr Kipling
'As expected, overall sales were down compared to the same quarter a year ago when we saw exceptionally high grocery volumes during the first national lockdown.'
Premier also observed that online demand was close to its levels in 2020 but was nonetheless double its pre-Covid amount, while international sales were 17 per cent  higher than two years ago. 
Alex Smith, a senior analyst at information services firm Third Bridge, says the private equity interest in the British grocery sector 'could well trigger fresh cost negotiations between the big supermarkets and suppliers like Premier Foods.'
He added: 'The prospect of increased competition will spur those that can eke out a cost advantage to do so now.'
Smith further warned that investors would be eyeing up any disruption related to the 'pingdemic,' which supermarkets have said is threatening food supplies and causing staff shortages.
For example, Iceland's managing director Richard Walker declared yesterday that his firm had been forced to shut some stores because hundreds of employees have been 'pinged' by the NHS Covid app.
Along with his father and Iceland founder Malcolm Walker, https://www.theclause.org/ he has called on the Government to allow those who have been double-vaccinated to be exempt from self-isolating.  
Premier Foods did not mention how it was being affected by the current self-isolation rules.

But Third Bridge's Alex Smith noted that it was being hit by higher prices for ingredients. 'Some of this cost pressure is linked to the global economy,' he said, 'but Brexit, complex logistics, and elevated tin prices are all playing a role.' 
Shares in Premier Foods closed trading up 4.8 per cent at £1.10 on Friday.


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