A rising fondness for Bisto gravy and Sharwood’s cooking sauces enabled Premier Foods to record much higher sales towards the end of last year.
The food manufacturer also said greater spending on television advertising contributed to pushing up purchases by 9 per cent in the 13 weeks to Boxing Day.
Trade online was especially robust, shooting up by 90 per cent over the third quarter as the group gained shares in the flavourings and seasonings market.
Premier Foods Alex Whitehouse: ‘Looking to the remainder of the year, out-of-home eating is likely to remain heavily restricted, and we therefore expect to see continued high levels of consumer demand for our products’
Chief executive Alex Whitehouse stated that restrictions on eating out had turned more people on to Premier Foods’ products, which have benefited at the expense of restaurants and pubs, some of the businesses worst hit by the Covid-19 pandemic.
‘Looking to the remainder of the year, out-of-home eating is likely to remain heavily restricted, and we therefore expect to see continued high levels of consumer demand for our products,’ he remarked.
Meanwhile, a stock-up of products ahead of the UK’s departure from the European Union on December 31st helped international trade climb 43 per cent, according to the firm.
Premier Foods believes there will not be ‘any material impacts’ from tariff changes and said it had not experienced any negative impacts to its supply chain from the trade deal agreed between the two parties.
It wrote that overall demand nearly doubled for Sharwood’s, a specialist in Asian foods that recently launched a new low sugar stir fry range, buoyed by solid growth in Australia and the United States.
Baked goods brand Mr Kipling has also become increasingly popular. Its sales rose by 7 per cent in the quarter, and the group recently agreed on a distribution deal with Weston Foods to sell and market Mr Kipling cakes in the United States.
Baked goods brand Mr Kipling has become increasingly popular, and Premier Foods has now agreed on a distribution deal with Weston Foods to sell and market Mr Kipling cakes in the US
Sales of non-branded goods did fall 2.7 per cent, but because purchases of both grocery and sweet treats did so well, the company’s total sales were up by 12.5 per cent in the year to date.
The FTSE 250 firm now expects its trading profit for the 2021 financial year to be £145million to £150million, a surge of at least £12.4million larger than previously forecast.
This is the second time the Angel Delight producer has enhanced its annual profit expectations since the financial year began in March, and now seeks to increase brand advertising and has new products planned for the fourth quarter.
AJ Bell’s Russ Mould said the pandemic had caused a marked change in the performance of Premier Foods, which has struggled with considerable debts and pension liabilities for some time.
Among the products owned by Premier Foods are the powdered dessert Angel Delight
‘Premier Foods has been in the sweetest of spots during the pandemic and it continues to feast on consumer demand for tasty treats and essential home cooking products.
‘It has enjoyed considerable sales growth momentum and the days of it being called a zombie company saddled with high levels of debt and no money to reinvest in its business are now long gone.
Mould speculated over whether the momentum will last when the pandemic dies down. He added: ‘There will be a lot of pent-up demand for people to eat out again, and for the return of ‘food on the go’ to satisfy people’s hunger.
‘Premier Foods will be hoping that some of the home cooking habits will remains for a lifetime, yet it is hard to see a permanent structural shift in how people source meals.’
Despite the results, Premier Foods’ shares ended 4.8 per cent lower today at 102.8p.