Premier Foods, the UK’s largest food maker, said today (15 July) that it expects trading profit to be in line with last year after it managed to recoup higher costs with price hikes.
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The company behind brands including Hovis bread and Mr Kipling cakes said the price increases had driven an 8% rise in turnover for the six months to 28 June.
Higher prices had also offset lower volumes from its grocery business, particularly from its own-label convenience foods, the company added.
Sales of Hovis had “stabilised”, Premier said, although at lower levels than a year ago.
Premier chief executive Robert Schofield said the “rejuvenation” of Hovis would play in a role in the “progress” expected in the second half of the year.
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By GlobalDataSchofield said: “We have good forward sight of inflationary pressures and have plans in place to mitigate them as they occur. Our expectations for the year remain unchanged with progress weighted to the second half as the benefits of synergies from the manufacturing rationalisation programme, price increases achieved to date and the rejuvenation of Hovis flow through.”
Premier said it remains “on track” to generate the GBP113m (US$227m) in synergies it set out after acquiring the Campbell’s and RHM businesses in 2006 and 2007.
However, the net costs of the integration process are likely to rose due to lower than expected proceeds from property disposals.
Premier will announce its half-year results on 28 August.
