Premier looks to big five brands to push sales

The five areas are Hovis bread, Mr Kipling cakes, Ambrosia and Hartley's desserts, Sharwood's and Loyd Grossman cooking sauces and Quorn meat substitute, which is made at Stokesley in North Yorkshire.

The group aims to grow its branded sales faster than the market and improve efficiency as it looks to reduce its 1.37bn debt pile.

Premier believes it can grow volumes of its key brands by one to two percentage points ahead of the market over the next three years. It also wants to expand sales at smaller brands such as Branston pickle, Bisto gravy and Oxo stock cubes.

Chief executive Robert Schofield said: "It's clear that in the recent recession it has been brands that are winning in the market place."

Premier said that Hovis has continued to make progress after capturing more than a quarter of the branded bread market last year.

Following a major advertising campaign, sales of Hovis-branded items rose 13.5 per cent to 370m and trading profits for the division increased 75 per cent to 42m.

Hovis accounted for 25.8 per cent of branded bread volumes in 2009, up from 22.1 per cent in 2008. Premier added that its grocery division grew sales by 4.8 per cent to 1.57bn as growth in ready-to-eat formats and the popularity of 'lunchbox treats' helped sustain brands including Ambrosia, Hartley's and Mr Kipling.

Sales of brands rose 6.5 per cent to 1.68bn following market share gains across all its products. Total sales were up 2.2 per cent to 2.66bn and trading profit rose 4.5 per cent to 323m.

The group took over Oxo, Batchelors and Homepride after the 460m deal in 2006 to buy Campbell's UK and Irish business. That was followed by the acquisition of RHM in a 1.2bn deal that transformed the business, but also saddled it with huge debts.