UK – Food processing company Premier Foods has reported exceeding market expectations for full-year profits owing to the robust growth of its grocery business. 

Premier Foods reported adjusted pre-tax profit increased by 15.1% to US$200.8 for the year ended March 30. 

According to a company-compiled consensus, Premier Foods’ was predicted to report a pre-tax profit of US$195 million for the reported period. The food processor’s branded revenues increased by 13.6%. 

This performance is tied to the robust growth of the company’s grocery wing. 

The grocery wing enjoys more than 25% market share in the categories it trades. 

The robust growth of Premier Foods’ grocery business is attributed to the high prices of restaurants and fast foods, which has caused customers to prefer eating at home.  

Grocery price inflation has also declined, caused by promotional activities of supermarkets and grocery retailers.  

The food processor leveraged strategic partnerships with supermarkets to maintain a strong market presence. These partnerships have helped Premier Foods proactively price its products among supermarkets and other retailers, including promotional activities.  

The company’s promotional pricing strategies contributed to sales volumes return to growth in the reported year. 

Premier Foods expressed satisfaction with the current pricing strategy and financial discipline, reiterating it does not intend to increase prices during this financial year. 

CEO Alex Whitehouse said, “We continue to maintain our strong financial discipline; leverage reduced to 1.2x Net debt/EBITDA this year, our lowest ever level, and we are proposing another 20% increase in the dividend.” 

The food processor announced its primary focus for the current year is driving volumes and optimizing efficiency, which would further increase profits.  

This optimization will mostly be done through strategies that offset high cost inflation. 

Premier Foods announced it would close down its beverage manufacturing site in the UK as part of this cost-cutting strategy, as it focuses on growing its grocery wing. 

The company also expressed optimism about its performance this year.  

“We have a strong set of plans for this year across each of our strategic pillars, and with our return to volume growth, we are on track to deliver full-year expectations,” Whitehouse added. 

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