Premier Foods recovers higher costs

Hovis maker Premier Foods said today it had recovered a large proportion of the “considerable” cost increases faced earlier in its financial year.

The group, which also sells Branston pickle and Hartley’s jam, reported a 3% rise in sales for the second half of 2007, helped by a satisfactory performance over Christmas and good progress by its Mr Kipling cakes business.

Despite the impact of cost pressures, including a doubling in milling wheat prices, Premier said it remained on course to meet full-year profit hopes.

It said retail price hikes, including rises in bread in September and October, had put the business on a solid platform at the start of 2008.

Bread competitors took market share after they delayed similar price rises, but Premier said rivals passed on their additional costs in December. Premier said it had also offset higher overheads through its own cost savings.