Icing on the cake for patriotic Premier Foods

The launch was supported by a major advertising campaign that helped the UK’s biggest food producer to report a two per cent rise in sales from its eight key brands in the first six months of this year.

Premier, which also owns Hovis, Bisto, Ambrosia and Loyd Grossman, said Mr Kipling sales “increased strongly” after it launched a snack pack format and other Jubilee-related products such as Mini Classics.

The company, which has a Manor Bakeries site in Barnsley, a Hovis site in Bradford and a Rank Hovis site in Selby, has been struggling under a £1.2bn debt mountain following a spending spree that included Mr Kipling owner RHM.

It hopes it is on the mend after sealing a £1.4bn refinancing deal with banks and £40m of cost savings ahead of plan by the end of this year.

The ongoing restructuring meant it recorded bottom-line losses of £27.3m, compared with profits of £11.2m last time, but focusing on the eight main brands its trading profits were 3.2 per cent higher at £53.2m.

Premier increased spending on marketing by more than 40 per cent to £24.8m in the half year, mainly through new television adverts showing the “strengths and heritage” of main brands such as Sharwood’s sauces.

While marketing spend in the current half will still be higher than a year ago, Premier plans to switch some of the budget to promotional activity.

It is seeing more products sold through money-off promotions rather than multi-buys as consumers seek value from a single shopping trip.

The competitive trading environment was particularly felt in the Hovis bread division, with total sales down by 3.6 per cent to £348.3m.

Premier said Hovis maintained its share of a declining market through better collaboration with supermarket customers, advertising and the launch of its Farmer’s Loaf.

More new products are expected to be unveiled this year.

Investec analyst Martin Deboo said the company had made a solid start to its turnaround plan.