Princes shares jump as boss of tinned tuna giant eyes M&A spree
The boss of Princes Group has laid the foundations for future deals after the firm’s admission to the London Stock Exchange helped build up its “firepower”.
Simon Harrison, chief executive of Princes, said the listing marked a “milestone period” for the group and created “exciting opportunities to pursue value accretive mergers and acquisitions, in line with our strategy”.
The remarks came amid Princes’ latest trading update where the group’s pre-tax earnings shot up over 51 per cent to £111.1m for the nine-months to September.
Shares jumped nearly five per cent in early trading to highs of 467p before giving back some advances to a 1.7 per cent gain.
The groups earnings margin – a crucial measure of profitability – expanded to 7.8 per cent from 4.9 per cent, driven by gains across Italian, foods and drinks segments.
Revenue came in at £1.4bn a drop from £1.5bn previously despite the earnings jump, reflecting the group’s deflationary pricing environment across raw materials.
Princes – which is known for everyday brands such as Napolina, Branston and Crosse & Blackwell – said it was focusing on “earnings quality,” reflecting the absorbed costs from raw ingredient pricing changes.
Data released last month showed fresh food inflation increased to 4.3 per cent year on year in October, against growth of 4.1 per cent in September and above the three-month average of 4.2 per cent, according to the British Retail Consortium (BRC).
Princes listing priced at bottom of range
Princes kicked off its public listing at the end of October pricing at the bottom end of its marketed range with a value of £1.2bn.
The figure came significantly under the £1.5bn Princes had hoped to net upon its float, but still placed it comfortably in line for admission to the FTSE 250 index.
Shares are down nearly five per cent since the company first floated.
The group is one of a fleet of new entry’s to the London Stock Market, which have included the lines of data centre energy business Fermi, specialist lender Shawbrook and Cheshire-based Beauty Tech.
The City has hoped the recent string of lists would open the flood gates to an influx of new listings in the year ahead.
But many are bracing for the forthcoming Autumn Budget, where Chancellor Rachel Reeves has faced warnings to be “careful” with policies that could derail the recuperating IPO market.
Julian Morse, chief executive of Cavendish, said: “The main driver [of the IPO market] is the economy, so if the government brings in policies which harm the economy, that is going to harm the IPO market.”
“They need to be very careful,” he added.