Premier Foods share price suffered a heavy fall yesterday, dropping by 9.57 per cent to finish on 52p after it announced a hit to sales of its main “power brands” range of products, such as Bisto, Homepride, Mr Kipling and Oxo.
However, it maintained its full-year profits expectations and announced a new joint venture with Specialty Powders Holding Limited.
The company blamed subdued grocery markets for the drop in sales in the second quarter, and it withdrew its prediction of a two to three per cent sales growth for its core brands for the year.
The St Albans-based food manufacturer also announced the creation together with Speciality Powders of a new joint venture, named Knighton Foods, which will include Premier brands such as Bird’s Custard, Angel Delight and Marvel, as it sought to cut costs and drive greater efficiencies at its existing manufacturing sites.
Specialty Powders will contribute its Phoenix Foods and Agglomeration Technology businesses to the joint venture, in which it will have a 51 per cent stake.
Premier Foods will also contribute its site in Knighton, Staffordshire and will have a 49 per cent stake.
The joint venture, led by Speciality Powder managing director Mike Kirby, will also enable the transfer of two production lines from Knighton to Premier Foods’ factory in Ashford in Kent.
Premier Foods will reveal its half year results on 22 July.