Premier Foods lifted by Christmas recovery

Premier Foods today said healthy Christmas sales had helped to compensate for lower demand created by the unusually mild autumn in the UK.

The maker of Sarson’s Vinegar and Birds Custard expected like-for-like sales to rise by 2% last year – or 1% after adjusting for the impact of the fire at its Bury St Edmunds plant which disrupted production of Branston Pickle in 2004.

This improvement was driven by higher demand for key brands such as Loyd Grossman sauces and Branston, which was recently expanded to include baked beans and pasta.

Growth was also sufficient to offset weakness in its potato business, which has been hit by lower market prices and volumes. Annual sales in this division are expected to be significantly lower than the £150.3m (€220m) reported in 2004.

Total sales across the group are likely to rise by 15% during the year as the benefits of an acquisitions drive that has seen Premier snap up well-known brands such as Quorn and Angel’s Delight fed through.

Premier swallowed Quorn in a landmark £172m (€251.2m) deal in June that took it into the healthy eating market for the first time before following it up with the £27m (€39.4m) acquisition of meat-free products supplier Cauldron Foods.

Both businesses were continuing to capture a greater slice of the market as consumers ditched fatty foods for more nutritional alternatives, Premier said.

Chief executive Robert Schofield said efforts to charge customers more for Premier products to offset the impact of exceptional rises in energy costs have yielded “satisfactory” results.

He added: “The impact on sales of exceptionally mild autumn weather has been compensated for by healthy Christmas trading.”

Both margins and earnings before interest, tax and amortisation should be within the range expected by Premier bosses, the company said in its statement.