P
remier Foods (LSE: PFD) was down by as much as 11% in early trading, following publication of an interim management statement for the third quarter, ending 30 September 2014. Its share price has since recovered a little, but still stands 9% down at the time of writing.
The company said that “increasingly demanding market conditions” were to blame for a reduction of 4.1% in branded sales over the quarter. Its ‘power brands’ — which include Sharwood’s, Ambrosia, Loyd Grossman and Mr Kipling — saw sales fall 5.1%. It noted that the cooking sauces and accompaniments category continues to be “highly competitive“, which it says held back sales of Sharwood’s and Loyd Grossman.
Premier Foods said that it anticipates trading profit for the full year to be towards the bottom end of market expectations. However, it went on to say that it is implementing a new organisational structure, which features three distinct strategic business units — Grocery, Sweet Treats and International — which it hopes will improve agility, focus and accountability.
Commenting on the management statement, CEO Gavin Darby said:
“The initial response to the relaunch of our biggest brand, Mr. Kipling, has been encouraging and we are implementing a strong programme of new product introductions and consumer marketing in the fourth quarter of the year to coincide with the important Christmas trading period. We continue to invest in our brands and strengthen our customer partnerships, while retaining a tight focus on managing costs, the delivery of Trading profit and organic deleveraging. I believe this balanced approach is central to creating value.“
Premier Foods has seen its share price fall off a cliff — it’s now around 80% down on this time last year, compared with an essentially flat FTSE All-Share index (it’s down 0.7%). And the longer term story is even worse. Over the past five years the FTSE All-Share has risen 28%, but Premier Foods’ share price has collapsed by 91%.
