Premier Foods trading profit down to £131m despite 81% marketing spend increase
Premier Foods has revealed a trading profit of £131m for the last year, which included an increase on marketing spend of 80 per cent during the second half of the period.
In releasing its figures for 52 weeks until 4 April, Premier Foods saw a post-tax loss of £92.7m due to impairment charges.
During the 52-week period, the sales for power brands declined by 4.6 per cent to £504.5m while support brand sales fell by 2.5 per cent to £179.2m, meaning that total branded sales were down by 4.1 per cent to £683.7m.
Non branded sales were down by 7.5 per cent to £83.7m meaning that total sales were £767.4m, a decrease of 4.5 per cent and trading profit fell by 6.4 per cent to £131m.
Gavin Darby, chief executive of Premier Foods, commented: "For the last quarter, I am pleased to again report an improving sales trend, which has benefitted from a combination of brand investment, exciting new products and strong retail execution. Across our branded portfolio, we have delivered volume and value share gains, while we have driven growth in our cake and flavourings and seasonings categories.
"Over the last twelve months, six of our major brands have benefitted from TV advertising and we have launched a number of new products to market, with more to come this year. We have also made good progress with our major customers and we now hold significantly more category captaincy roles than we did three years ago.
"While it is encouraging to note the return of volume growth to both our categories and the wider grocery market, we expect the near term trading environment to be challenging, and our expectations for the year are unchanged. I remain confident that our strategy of investing in brands, innovation and infrastructure is the right one for Premier Foods, and see increasing evidence that our efforts are starting to pay off. The Board is firmly focussed on the creation of future value, and believes that its investment and growth strategies, combined with a focus on cost efficiency, Trading profit delivery and organic de-leveraging, are well positioned to deliver success," he added.
Quarterly sales results were down by 0.6 per cent overall to £186m, with Power Brands down by 1.6 per cent to £124.9m and support brand sales were up by 4.5 per cent to £45.2m with a total of £170.1m, similar to the same period in 2014.