Premier Foods has exceeded £1bn in sales as the premiumisation trend buoyed sales of its posh cake lines and acquisitions delivered “double-digit growth”.
The Mr Kipling and Ambrosia maker posted headline revenue growth of 3.5% in the year to 29 March 2025 to £1.1bn.
Headline profit was “ahead of expectations”, up 6% to £187.8m, while revenue from branded products increased 5.2%, to over £1bn.
Grocery branded revenue increased by 4.6%, with recent acquisitions The Spice Tailor and Fuel10k both delivering double-digit revenue growth.
In the fourth quarter, grocery headline revenue increased by 1.1%, with branded growth of 1.9% and non-branded revenue 7.4% lower. This run rate reflected the anniversary of “commencing sharper promotional price activity”, according to Premier Foods.
Posh cakes
Sweet treats branded headline revenue increased by 7.3% in the year, partially offset by non-branded revenue, so total headline revenue grew 4.0%.
Divisional contribution increased to £35.4m in sweet treats, and margins increased slightly to 11.9%, a 20 basis point improvement on last year supported by strong volume growth.
Mr Kipling’s Signature premium ranges performed particularly well; Brownie Bites grew by 78%, while Best Ever Mince Pies doubled revenue through expanded distribution, and indulgent Chocolate & Caramel Layer Cakes were launched to market.
Their performance demonstrated the “premiumisation consumer trend” seen in the UK market, said Premier Foods.
In the second half of the year, Mr Kipling introduced Birthday Cake Tarts and Strawberry & Cream tarts which had “a very strong start”, and Strawberry & Cream French Fancies.
Cadbury grew volumes and revenue consistently during FY24/25; Caramel Mini Rolls were launched in the second half which supported “strong performance” across the core range.
During the year, the Group extended its licence with Mondelez Europe GmbH to manufacture and sell Cadbury cake and ambient desserts through to 2028.
Non-branded revenue declines were due to “contract exits of French Fancies in the first half of the year and Swiss Rolls in the second half, and consumers switching to our brands”, said Premier Foods.
In quarter four, sweet treats revenue increased by 5.3%, with branded revenue up 7.8% and non-branded revenue 12.5% lower.
Increased market share
“The business has delivered another strong year… driven by particularly good volumes which resulted in us taking further market share,” said Premier Foods CEO Alex Whitehouse.
“Our premiumisation strategy continues to be highly relevant, reflecting the trend for consumers to trade up and treat themselves to ranges such as our Ambrosia Deluxe and Mr Kipling Signature Bites, both of which delivered very strong revenue growth this year.”
“Our Nissin noodles again achieved double-digit sales growth, taking yet more market share, and benefitted from the addition of big pots and Demae Ramen to the range.”
“In addition to the strong financial performance, we have also made progress against all the pillars of our growth strategy; we significantly increased capital investment in our manufacturing sites this year, delivering improved efficiencies and providing the platform for future growth.
“Our revenue in new categories rose by 46%, led by Ambrosia porridge pots, and we also grew our overseas businesses by 23%.
“Additionally, and as we apply the benefits of our Premier Foods branded growth model, our acquired brands, The Spice Tailor and Fuel10k, both delivered double-digit sales growth this year and remain well set for significant future growth.”
The future for Premier
“We have now reduced our leverage to below 1x adjusted EBITDA, reflecting the strong cash-generating capacity of our business and the suspension of pension deficit contribution payments.
“We are one step further towards the full resolution of the pension scheme, and with the removal of the dividend match we are stepping up our distribution to shareholders this year with a 62% increase in the dividend.
“As we look ahead to the coming year, we expect revenue growth to be supported by a strong product innovation programme and our expectations for trading profit growth are unchanged.
“In line with our capital allocation framework, we will continue to invest in projects to both increase efficiencies and automation and facilitate growth through product innovation and capacity, while we also remain focused on pursuing M&A opportunities where we can add value to brands through the application of our branded growth model.”
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