General Mills UK brands

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General Mills has posted sales and profits ahead of expectations in its first quarter as the US food group continues to reshape its portfolio.

Net sales at the company rose 4% to $4.5bn (££.3bn) in the three months ended 29 August - up 2% on an organic basis.

Operating profits declined 1% to $844m as a result of gains on corporate investments driving the bottom line higher a year ago.

General Mills, which owns brands such as Cheerios, Nature Valley, Häagen-Dazs, Betty Crocker and Old El Paso, said it expected changes to consumer behaviour driven by the pandemic - such as home working and increased appreciation for cooking and baking - to result in ongoing elevated demand for food at home compared with pre-pandemic levels.

“I’m proud of the way our team is performing in a dynamic and challenging operating environment,” chairman and chief executive Jeff Harmening added.

“Our strong execution in the first quarter enabled us to deliver top- and bottom-line results ahead of our expectations. We delivered these good results while continuing to advance our ‘Accelerate’ strategy, including making important progress on portfolio reshaping in the quarter.”

In July, the group completed the acquisition of Tyson Foods’ pet treats business as part of its new strategy, which sees General Mills focus more heavily on the pet food category in the US.

General Mills said the increase in the pet population and further humanisation and premiumisation of pet food during the pandemic were expected to create tailwinds for the category.

“The company plans to capitalise on these opportunities, addressing evolving consumer needs through its leading brands, innovation, and advantaged capabilities to generate profitable growth,” the group added.

Earlier this year, General Mills sold off its European holding in yoghurt brand Yoplait to French dairy co-operative Sodiaal as part of its new strategy.

General Mills forecast that organic net sales for the new financial year would be towards the higher end of its initial guidance range of down 1 to 3%, reflecting the stronger-than-expected- first quarter.

Shares in the group jumped more than 3% on the back of the results.

Morning update

Reckitt Benckiser issued a very short trading update on its performance since the half-year results in July.

The multinational said trading had been in line with management expectations.

“We continue to be confident in delivering FY 2021 like-for-like net revenue growth of 0-2% and adjusted operating profit margins of between 22.7-23.2%,” the group said.

Reckitt will report Q3 results on 26 October 2021.

Real estate investment form Supermarket Income REIT has reported its annualised passing rent doubled to £57.8m on the year ended 30 June as it continued to expand its supermarket portfolio.

The group’s direct portfolio is now independently valued at £1.2bn - an increase of £609m following valuation growth of £67.8m and new acquisitions of £541.2m.

Earlier this week, the company added a further five supermarkets to its holdings for £95m.

Pre-tax profits for the year soared 150% to £82m.

Chairman Nick Hewson said he was “very pleased” to report “another solid set of results”.

“During the year, our direct portfolio has benefited from an 8.5% like-for-like increase in valuation, delivering an EPRA NTA of 108p per share as at 30 June 2021.

“Since our initial listing in 2017 we have delivered a 40% total shareholder return and continue to offer our investors stable, long-term, inflation-protected income that is backed by one of the most compelling real estate asset classes in the UK investment market.”

The British Honey Company, the producer of premium British honey, honey-infused spirits and no/low products, has announced its interim chairman and CEO Michael Williams has stepped down.

Williams will remain on the board as a non-executive director pending the appointment of his replacement as chairman. A professional search firm has been appointed to seek a suitable successor.

Philip Seers has also resigned as senior non-executive director but will continue to provide advisory services to the company as required by the board. Robert Porter-Smith has re-joined the board as a non-executive director.

Alex Maurice, currently chief of staff, has been appointed chief operating officer. He will appointed to the board pending completion of the standard regulatory checks.

The FTSE 100 continued its forward march this morning, rising 0.5% to 7,119.30pts.

Early risers in food and drink included Hotel Chocolat, Nichols and AG Barr, while SSP Group, Devro, Kerry Group and THG were among the fallers.

Yesterday in the City

The FTSE 100 continued its recovery from the global sell-off earlier this week to end the day 1.5% higher at 7,083.37pts.

Personal care and hygience group PZ Cussons suffered at the hands of investors after sliding to a full-year loss and reporting a slowdown in demand for sanitiser brand Carex in the first quarter. Shares in the group fell 4.6% to 220p in response.

Other fallers included Kerry Group, Virgin Wines and Bakkavor, which were down 4.6% to €120.75, 3.9% to 197p and 1.6% to 126p respectively.

Hotel Chocolat led the risers in UK food and drink yesterday, with shares up 3.6% to 393.6p, while McColl’s Retail Group rose 3% to 19.2p and AG Barr climbed 1.3% to 532p.