Premier Foods boss Michael Clarke hopes to “draw a line under” its 2011 performance after recording a £259.1m pre-tax loss.
The loss for the year to 31 December was largely down to a £282m impairment charge relating to its Hovis business. Profits in its bread division fell 90% to £3.4m from £35.3m in 2010. Several Hovis lines were temporarily delisted by Tesco last Spring following a pricing dispute. In February this year, Premier announced plans to close one of its Hovis bakeries with more than 80 staff facing the axe.
Sales for Premier’s ongoing business fell 3.4% “reflecting the consumer environment” and the effect of previous customer spats, with turnover for its ‘Power Brands’ dropping 5.6% to £871m.
CEO Michael Clarke has pledged to double marketing investment behind these brands this year and leverage their “Britishness” with seven out of the eight returning to TV screens. He said Premier would develop joint business plans with key customers and a specific pricing and promotional strategy for the discounter and wholesale segment.
Last week, Premier received backing from its banks and pension scheme partners for a four and a half year re-financing package which extends its bank facilities of £1.4bn until June 2016.
While the consumer environment remained challenging, this package would help the company push forward with its new growth strategies, said Clarke. “We intend to draw a line under the performance of 2011,” he said. “I’m convinced we have the right team to turn this business around and I am very positive about our future.”