Premier Foods has posted a strong first quarter, with trading in line with expectations and its full-year outlook unchanged.
The Mr Kipling owner reported sales growth of 6 per cent in the 13 weeks to 2 July against a year ago, while branded items and grocery revenues jumped 4.5 per cent and 6.3 per cent respectively.
Premier Foods said Batchelors and Nissin performed particularly well, with ‘good value meal solutions’ proving increasingly popular amid the cost-of-living crisis.
Update: Premier Foods said it enjoyed a ‘strong’ first quarter in a trading update today
Non-branded growth of 17.1 per cent was attributed to a strong recovery in out-of-home sales and pricing benefits in retailer-branded product categories.
The group saw international sales rise 12 per cent.
Cadbury cake enjoyed a strong quarter, while Mr Kipling sales were higher despite timing changes to promotional activity.
Premier Foods said it has been trading in line with its expectations and it has continued to gain market share both in-store and online.
Premier Foods’ shares rose this morning and were up 0.54 per cent or 0.6p to 111.20p, having risen by around 7 per cent in the last year.
Alex Whitehouse, the group’s chief executive, said: ‘We’ve made a strong start to this financial year, growing sales by 6 per cent in the quarter and again increasing market share both instore and online, as we continue to apply the elements of our branded growth model.
‘Our recently launched new products include a healthier range of Mr Kipling Deliciously Good cakes and authentic East Asian Sharwood’s cooking sauces while Mr Kipling benefitted from a new TV advertising campaign in the quarter. Sales overseas increased by 12 per cent due to a particularly strong cake performance in Australia, where Mr Kipling delivered its highest ever market share.
‘We have made good progress in recovering our input cost inflation through a range of measures, including cost efficiencies and pricing, and we continue to monitor the situation closely.
‘Consumers are increasingly looking to cook tasty affordable meals at home; this fits well with our broad portfolio of brands and was illustrated by the strong performance of Batchelors and Nissin in the quarter. With this positive trading momentum behind us, we remain firmly on track to deliver our expectations for the year.’
Danni Hewson, a financial analyst at AJ Bell, said Premier Foods’ update was ‘encouraging’.
She added: ‘This offers some evidence of brand power, although how long Premier Foods can sustain its edge over rising prices remains to be seen.
‘There’s only so much fat you can trim off a business before you start damaging its operational performance though, and despite featuring many household favourites, Premier Food’s product portfolio is not immune to the risk of consumers trading down to cheaper supermarket own-brand alternatives.
