Source: Premier Foods

Premier Foods has returned to volume growth and pricing stability, and is now mooting M&A to further boost its branded portfolio.

A return to volume growth in the fourth quarter helped boost headline revenues by 15.1% to £1.12bn for the full year, the Mr Kipling maker announced in annual results for the year to 30 March on Thursday.

The group said its shift back to volume growth, which follows a period of price-driven sales gains, was driven by a step-up in promotional activity.

CEO Alex Whitehouse said: ““If you were to do a shopping trip today, and take advantage of the various promotions being run, many of our products are actually cheaper than a year ago.

“Not all of them, but a great many. This is obviously good news for consumers across the UK.”

The group entered the fourth quarter with price-driven growth but exited the first three months of 2024 with high volumes “at a lower price per unit”, he added.

Whitehouse said he expected the shift to volume-led growth to continue and did not anticipate any need to increase pricing during the current year.

Overall growth was driven by branded grocery, which was up 16.7% in the year to £740.4m, though branded revenue growth in its ‘sweet treats’ division was slower at 4.2%.

Trading profit rose by 14% to £179.5m, lagging the headline growth rate due to a rise in group and corporate costs, and significant investment in marketing across all major brands.

Premier said its October 2023 acquisition Fuel10K was performing “very well” and suggested it could boost its branded portfolio with further acquisitions.

Whitehouse said the suspension of pension deficit contributions and resultant increase in free cashflow “enhances our ability to invest in infrastructure and pursue M&A opportunities to deliver future growth”.

He said this M&A could involve bolt-on UK brands to expanded its brand range or international targets “that would give us a bridgehead into some of our target overseas markets and facilitate or accelerate our overseas expansion plans”.