Premier Foods sees profit dip with extra pension cost

City A.M. Reporter
BRITAIN’S largest food producer Premier Foods yesterday posted a lower profit on additional pension and restructuring costs, but said it was on track to generate its targeted cash flow for 2010, sending its shares up nine per cent.

The FTSE-250 group, which had been laden by heavy debts mostly due to some of its acquisitions, reduced its debt pile by £110m to £1.37bn.

But for the six months ended 26 June, the company’s pre-tax profit fell to £33m from £39m last year. Revenue fell 5.2 per cent to £1.18bn.

Premier continued to invest in its brands and added £6m to its consumer and in-store marketing spend in the reporting period.

“We had acquired a lot of brands and they’ve been under-funded. So we are trying to make up for that under-funding now as we restore the brands,” chief executive Robert Schofield said.

He said he remained “open minded” about the disposal of some of the company’s assets, but he ruled out the possibility of buying new brands.

“It takes us a few years to get to our target (of cutting debt) organically. Therefore we are open minded about disposals if they accelerate that journey,” he said yesterday.

Premier, whose brands include Hovis bread, Branston pickle and Bisto gravy, said it was still cautious about market conditions in the uncertain consumer climate.