Premier Foods enjoys stronger sales as consumers opt for affordable meals

The company’s revenues went up by 6.2 per cent in the half year to October 1 to £419m, from £394m a year ago. The group’s adjusted pre-tax profits swelled by more than a tenth, from £42m last year to £47m this year.

The food firm said it had managed to cushion the impact of cost inflation, which has pushed up food and drinks prices significantly, by making cost savings and increasing its prices.

An annual price increase will be made in the fourth quarter of the year, which the group expects to help make up for inflated costs.

People are finding that the “best restaurant in town is at home”, Premier Foods’ said, which means that its brands have benefited from the shift to affordable meals as consumer budgets are more squeezed.

The company is set to launch a campaign encouraging people to cook and prepare affordable meals at home for just £1 a serving. Premier Foods said that its cooking sauces like Loyd Grossman and Sharwood’s have performed particularly well this year. The company acquired meal kit brand The Spice Tailor for £44m in July in a further bid to take advantage of the home cooking market.

Premier Foods’ chief executive Alex Whitehouse said: "We have again made very good financial and strategic progress in the first half of this year, reporting strong group and branded revenue growth in what continues to be a challenging environment.

"Our margins were in line with last year, and we delivered adjusted PBT growth of nearly 12 per cent due to our consistently good trading performance and lower interest costs following our refinancing in H1 (first half) last year."

"We continue to deliver against our five pillar growth strategy: our UK branded revenue has now grown 5 per cent on average over the last three years; we continue to invest in our supply chain to drive efficiencies; revenue from extending our brands into new categories more than doubled, and international revenue increased by 11 per cent. Additionally, we have welcomed the highly complementary brand The Spice Tailor into our portfolio in the first half; our first acquisition for over 15 years."

"The financial resilience of the group is illustrated by our strong underlying cash generation, our 2026 dated fixed rate bonds following our 2021 refinancing, continued commitment to a leverage target of 1.5x and limited direct exposure to the US dollar."

"The current economic climate is undoubtedly challenging for consumers, and our broad range of affordable brands have always played a key role for families when times are tough.

"In this environment, our portfolio of brands continues to display strong momentum and are well placed to deliver further growth."

"As we look to the second half of the year, we will be launching more consumer insight driven new products such as Plantastic branded Millionaire Flapjacks, Mr Kipling Brownie Bites and pigs-in-blanket flavour Bisto granules for Christmas, in addition to further advertising behind our major brands. A big feature of our brand activation will be helping people cook and prepare affordable meals at home for just £1 per serving through our "Best Restaurant in Town" campaign."