Premier Foods, the London-listed owner of Mr Kipling cakes and Bisto gravy has reported a healthy 9% rise in third quarter sales, with a 90% surge in online orders.
The firm also upgraded its full year expectations in what it called another “exceptional quarter of trading”. It now sees trading profit to be in the range of £145-£150m this year after increasing its marketing investment in the fourth quarter.
Premier Foods sales growth
The Group delivered another exceptional quarter of trading in Q3 with sales growth of 9% compared with the prior year, and 12.5% ahead on a year to date basis.
Grocery Brands were the significant contributor to this performance, as sales increased 14.6% in the quarter and 20.8% year to date.
Sales of Non-branded products were (2.7%) lower in the period.
Premier said it continues to outperform its markets, gaining both volume and value market share across the quarter.
The vast majority of the firm’s Grocery brands continued to see substantial growth with more meals eaten at home by consumers, reflecting further pandemic lockdown restrictions in the UK.
Sales of Sharwood’s cooking sauces grew by 40% in Q3 due to strong commercial plans and new product launches while Bisto and Batchelors both reported healthy double digit sales growth, supported by increased investment in television advertising.
Ambrosia also delivered increased sales in the quarter, benefitting from a new TV advertisement campaign, the firm said.
The firm continued to realise household penetration gains in the quarter, especially in its Grocery categories as consumers looked for variety in their meals prepared at home.
Online saw sales growth of +90%, slightly ahead of the market, with notable share gains in Flavourings and Seasonings.
“Quarter 3 proved to be another period of exceptional growth, with Group sales up 9.0% and branded sales up 12.1%, as people turned to our product ranges in the face of heightened restrictions on out of home eating,” said Premier Foods CEO, Alex Whitehouse.
“Our colleagues have carried out a magnificent job supplying this elevated level of demand, keeping the business fully operational while at the same time retaining strict measures to keep each other safe.
“We continue to deploy our branded growth model strategy, launching a series of new products in the quarter such as Sharwood’s low sugar stir fry sauces and supporting five of our major brands with TV advertising.
“Together with excellent execution both instore and online, we continue to take market share in volume and value terms.
“Online sales were up 90% in the quarter, ahead of the broader channel and we saw higher household penetration for brands such as Bisto, Oxo and Paxo, as more meals were eaten at home this Christmas.”
“Looking to the remainder of the year, out of home eating is likely to remain heavily restricted and we therefore expect to see continued high levels of consumer demand for our products.
“With more brand investment to come, we now expect Trading profit to be in the range of £145-£150m this year and Net debt/EBITDA to fall below 2.0x by the year end.”
Premier noted that in advance of the end of the EU exit transition period, the company has developed a comprehensive set of mitigation plans and preparations to ensure continuity of supply of its products.
With a free trade agreement with the EU now in place, the firm is not expecting any material impact from tariff changes.
“To date, these new arrangements have not resulted in any major disruption to the Group’s supply chain”, Premier said in its statement to the stock market.
Premier’s shares were trading 1.5% higher at £1.09 in London on Tuesday morning.