Premier Foods’ profits surged in the first half of the year, with its sweet treats like Mr Kipling leading the charge.
The group’s pre-tax profits grew 18.5% to £63.4m in the 26 weeks ended 27 September, with its sweet treats business delivering a profits rise of 21.4% to £14.2m.
Sweet treat sales grew 6.8% to £133.1m in the period off the back of a raft of innovations including the US-inspried Mr Kipling birthday cake tarts, Mr Kipling Signature collection brownie bites, and Cadbury caramel mini rolls.
There were still struggles, however, with overall grocery sales down 1.3% as warm weather over the summer led to reduced demand for products like gravy, stock, and soup. This did turn around in the second quarter though, as sales grew 0.9%. Total revenue was up 0.7% to £502.5m.
International sales fell 0.4% after Australian retailers began reducing their buffer stocks of cake because shipping consistency and lead times from the UK have improved.
Sales in Australia remain strong, with revenue up 17% and major share growth in cakes and Indian sauces driving record market share.
“Looking forward to the remainder of the year, we expect branded revenue growth to build, supported by both a particularly exciting product innovation programme and increased H2 marketing investment,” said CEO Alex Whitehouse.
”We’ll be driving benefits from the Merchant Gourmet acquisition and integration, and we continue to explore additional inorganic opportunities which fit our M&A criteria.”
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