Premier Foods aims for mergers and acquisitions as brand sales exceed £1bn

Premier Foods had an exceptional year, surpassing expectations as annual profits exceeded projections and branded sales hit £1bn. CEO Alex Whitehouse described the 52 weeks ending on 29 March as “another strong year” for the group, emphasizing the importance of continued mergers and acquisitions (M&A) in driving growth.

The company saw a 5.2% increase in turnover from its range of brands, including popular names like Mr Kipling, Nissin, and Ambrosia, surpassing £1bn for the first time. Overall group revenues rose by a more conservative 3.5% to £1.2bn due to a deliberate decrease in own label activity. Trading profits soared by 6% to £187.8m, exceeding expectations in the City.

Premier’s growth was primarily fueled by increased volumes resulting from enhanced promotional activities and pricing strategies that facilitated gains in market share. Whitehouse anticipated a more balanced growth trajectory in the upcoming financial year, aiming to counter input cost inflation by focusing on both value and volumes.

Notable performers for 2024/25 included Nissin noodles, experiencing double-digit sales growth, and premium ranges like Ambrosia Deluxe and Mr Kipling Signature Bites, reflecting consumer interest in trading up despite a challenging economic environment. Premier’s foray into new product categories such as porridge and ice cream also paid off, with sales climbing by an impressive 46%, led by popular products like Ambrosia porridge pots.

Strategic acquisitions played a significant role in Premier’s success, with brands like The Spice Tailor and Fuel10K exhibiting double-digit growth and promising prospects for future expansion. Whitehouse stressed the importance of acquiring brands as a key component of the company’s growth strategy, citing the successful integration of Fuel10K and The Spice Tailor as evidence of this approach.

Looking ahead, analysts highlighted the critical role of further acquisitions in Premier’s growth strategy, noting the company’s increased organic capital expenditure and enhanced potential for larger M&A activities. The company’s robust financial position enabled a significant reduction in net debt and a 62% rise in shareholder dividends. Premier remains committed to investing in efficiency improvements, product innovation, and capacity expansion, while actively pursuing M&A opportunities to enhance brand value.