Mr Kipling

Premier Foods pacified investors smarting at the board’s rejection of McCormick’s 65p per share advances last year with promises of super-charged growth prospects driven by its partnership with Japan’s Nissin Foods.

Shareholders are still waiting for these returns to materialise and their patience is being tested again after the Mr Kipling maker this week appeared to ditch its medium-term growth target of 2-4% to move to a “balanced” strategy.

After a solid start to the year, Premier was derailed by a disastrous second quarter, which led to a profits warning in January and a collapse in its share price to below 40p. Premier’s better fourth quarter prevented a 1.4% slip in underlying sales in the year to 1 April 2017 and a 9.3% drop in trading profits to £117m. Revenues were hit by a plunge in soup and gravy & stocks sales in the second quarter, but the Batchelors supplier was also hit by delays in recovering input cost inflation and supermarkets cutting back on multibuys.

Premier’s efforts to turn around declining sales were at the forefront of plans drawn up to combat McCormick’s approach, but the targets were scaled back this week to a more “balanced” strategy also covering cost efficiencies and debt reduction. This shifting focus is designed to bring the net debt to EBITDA ratio down to under 3x.

The stock slumped 2.3% to 42p on Tuesday, representing a 7.7% fall since last Friday.

Analysts were a touch more optimistic. “The numbers are generally on the right side of in-line,” said Credit Suisse. “It looks like the group has secured some price rises against the input inflation (albeit later than it expected)”.

Booker continued to show why Tesco is prepared to stump up £3.7bn after posting a 15% rise in full-year pre-tax profits to £174m and a 6.7% sales hike to £5.3bn. Despite a 4.6% plunge in like-for-like tobacco sales, Booker managed to grow like-for-likes by 0.5% as non-tobacco like-for-likes rose 2.8%. Booker shares edged up 0.3% to 199.8p by lunchtime on Thursday.