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Premier Foods (PFD) has pulled the prospective sale of its Ambrosia rice and custard brand.
Premier announced it was seeking a potential sale of its third largest brand in November 2018, with analysts suggesting the listed food group was seeking around £130m-£140m.
Premier said it has been “engaged in discussions with third parties” over a sale and has been in “detailed discussions with a small group of potential buyers” since the New Year,
However, it said that “in the present business climate the process will not result in a satisfactory financial outcome”.
“As a result, these discussions have now concluded.”
The proposed Ambrosia sale was one of the final strategic initiatives of former CEO Gavin Darby who stepped down from Premier last month.
A search of his successor remains ongoing, with chief financial officer Alastair Murray acting as CEO.
Premier shares have dropped 4.4% to 35.6p so far today on the news.
Morning update
After the deals to save Patisserie Valerie and Midlands-based sandwich business Philpotts yesterday, news of a deal on the sale of the Baker & Spice London bistro chain is expected soon.
A management buyout for Patisserie Valerie with the support of Irish private equity firm Causeway saved a total of 96 Patisserie Valerie stores.
Separately, retailer and wholesaler A.F. Blakemore & Son has acquired all 21 stores of Midlands-based sandwich business Philpotts.
It is understood talks regarding a sale of Baker & Spice were taking place alongside these other deals, but ran out of time to complete. The finalisation of a deal is thought to be imminent.
KPMG said yesterday that further announcements regarding Baker & Spice “will be made in due course”.
Elsewhere, Tesco (TSCO) is explaining to analysts the impact of its shift to IFRS 16 accounting standards this morning.
The supermarket said the impact of adopting IFRS 16 on its first half 2018/19 results will increase group operating profit by £188m to £1.12bn as rent is removed from consideration and “only part-replaced by depreciation. Therefore group operating margin increases by 59 basis points to 3.53%.
However, profit before tax decreases by £101m due to depreciation and interest being higher than the rent they replace. Net assets are reduced by £1.4bn to £13bn and total indebtedness increases by £3.3bn to £15.8bn.
Group sales are unaffected by the changes.
On the markets this morning, the FTSE 100 has edged up a further 0.1% to 7,203.9pts so far today.
Early risers include Devro (DVO), up 2.2% to 168.8p, Coca-Cola HBC (CCH), up 1.6% to 2,502p after yesterday’s falls and McColl’s (MCLS), back up 1.2% to 51p.
Fallers so far include C&C Group (CCR), down 2.3% to €2.97, Bakkavor (BAKK), down 2% to 148.4p and Ocado (OCDO), down 1.4% to 902.4p.
Yesterday in the City
Shares of multinational soft drinks giant Coca-Cola plunged 9.2% yesterday to $45.59 after it reported a 6% decline in sales to $7.06bn and warned organic growth was likely to slow in 2019, with sales set to be hampered by adverse currency fluctuations.
European Coke bottler Coca-Cola HBC fared little better, dropping 8.6% to 2,463p after warning that its own growth would slow in a number of markets in 2019.
UK, Spain and German Coke bottler Coca Cola European Partners dropped a more modest 1.4% to $46.79 after its full year like-for-like profits jumped 7% on the back of surging sales for sugar-free and energy drinks.
Elsewhere, global food giant Nestle rose 1.6% to CHF88.06 and set a new all time share price high earlier in the day after forecasting improved sales and margin growth in 2019 and announcing the possible sale of its Herta meat brand to focus of higher growth areas.
In the UK, the FTSE 100 edged up 0.1% to solidify recent gains and end the day at 7,197pts.
Risers included Stock Spirits Group (STCK), which rose 4.7% to 235.5p after updating the market on growth in its key Eastern European jurisdictions. Also on the rise were McBride (MCB), up 3.9% to 132p, Premier Foods, up 2.1% to 37.2p, Majestic Wine (WINE), up 1.7% to 274.5p, FeverTree (FEVR), up 1.6% to 2,857p and Greggs (GRG), up 1.2% to 1,573p.
In addition to CCH, other fallers included McColl’s (MCLS), down 3.1% to 50.4p, Nichols Beverages (NICL), down 2.3% to 1,490p and Associated British Foods (ABF), down 1.9% to 2,260p.
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