Premier Foods shares sink as heatwaves put shoppers off gravy and soup
The company, which owns Ambrosia, Bisto, and Oxo, reported sales of £240million at constant currency for the quarter to 28 June, up 0.3 per cent from a year ago. Branded sales rose 1.2 per cent compared to a year ago.
'First-quarter trading was as expected given the weather and tough comparables,' Peel Hunt analysts said in a note.
'The first quarter is the smallest in revenue terms and we make no changes to our full-year forecasts.'
The update drove Premier Foods shares down 4.14 per cent or 8.00p to 185.40p on Thursday.
The group left its annual trading profit forecast unchanged. Analysts expect full-year earnings of £195million.
Rising inflation, higher employer costs, and economic uncertainty have forced Premier Foods to navigate a challenging environment by focusing on expanding into new categories across its markets to drive growth.
It expects to drive branded revenue growth this year with new launches, including FUEL10K yogurt and granola pots.
The company said new product ranges such as Mr Kipling birthday cake tarts performed strongly in Britain in the period.
Sales across the group's sweet treats arm rose 11 per cent, offsetting a 2.7 per cent drop in grocery revenue in the quarter.
The firm continued to grow volume and value market share overall, despite the impact of recent warmer weather on some grocery products.
Non-branded grocery revenue fell 8.8 per cent due to consumers switching brands and Premier's decision to exit some lower margin contracts.
Overseas revenue rose by five per cent at constant currency, with 'good sales growth' in Australia.
The second half of the year will see an acceleration in new product development launches, the business said.
Alex Whitehouse, the group's chief executive, said: 'We continued to grow volume and value market share overall, despite the impact of recent warmer weather on some grocery categories.
'We expect branded revenue growth to build through the year, as we launch further new products, such as FUEL10K yogurt and granola pots.'
He added: 'Our profit expectations for the full year are unchanged, underpinned by our proven branded growth model and ongoing cost efficiency programmes.'
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