Food group Premier rises after bank support

Debt-laden Hovis bread maker Premier Foods secured vital breathing space today as it battles against soaring interest payments and wheat prices.

Britain’s biggest food maker, which has a debt mountain of £1.6bn (€2.08bn), rejigged its finances in a move that will also provide it with resources to take on rivals Warburton’s and Kingsmill with a new recipe for its Hovis white range.

The new agreement with bankers allayed fears that Premier will breach borrowing terms, leading to a recovery in its share price after recent falls. It slashed its final dividend payment in order to shore up its balance sheet, but the company stopped short of slashing the payout altogether.

The group, which makes Mr Kipling cakes, Branston Pickle and Quorn, has been weighed down by the acquisitions of Campbell’s Soup and RHM, which makes Hovis.