Premier Foods to pay 1.12p interim dividend, its first in 19 years
The owner of Bisto, Oxo and Mr Kipling has raised its full-year profit expectations after refinancing its debt more cheaply, and will pay 1.12p a share on 18 December.
By Daily Oracles News Team2 min read
Premier Foods will pay an interim dividend of 1.12p a share on 18 December, its first for 19 years, to shareholders on the register on 20 November. The payment comes on top of the final dividend. The board said in May that an interim payment would start this financial year, with the amount to be set out at the half-year results.
The group, whose brands include Ambrosia, Batchelors, Bisto, Loyd Grossman, Oxo and Sharwood's, reported headline revenue of £514.2 million for the 26 weeks to 26 September, up 2.4%. Branded revenue grew 3.2% to £467.3 million, slowing to 2.5% in the second quarter. Trading profit rose 2.4% to £72.2 million and adjusted profit before tax 3.8% to £64.7 million.
Sweet Treats branded revenue rose 6.7%, the division's twelfth consecutive quarter of growth, and Mr Kipling sales rose 10%, making it a £200 million brand for the first time. Grocery branded revenue grew 2.0%, held back in places by long spells of hot weather.
Overseas sales rose 8% in the half and 10% in the second quarter. FUEL10K, The Spice Tailor and Merchant Gourmet, the three brands bought in recent years, all grew revenue by double digits, and FUEL10K has started selling in Europe.
Cheaper borrowing
The upgrade to full-year guidance comes from the balance sheet rather than trading. In September Premier Foods took out a £175 million bank term loan at 1.55 percentage points over SONIA, running to September 2028, and in October used it with cash to repay £330 million of fixed-rate notes. It also has a £367.5 million revolving credit facility to May 2031. Net debt stood at £131.2 million at the end of September, £75.9 million lower than a year earlier and 0.6 times adjusted earnings before interest, tax, depreciation and amortisation.
The company now expects net regular interest of about £18 million this year, trading profit around 3% to 5% higher, and adjusted profit before tax and adjusted earnings per share at the top end of market expectations.
Statutory profit after tax fell to £41.0 million from £46.8 million, which the company put down to higher restructuring costs and a smaller pension credit.
Capital spending rose 54% to £35.9 million, covering a faster production line at Carlton, near Barnsley, extra cooking sauce capacity at Worksop, an expansion of the Ambrosia site at Lifton in Devon and several projects at Ashford.
