Premier Foods (LON:PFD) reported a strong third quarter and said it is now guiding full-year trading profit to the upper end of market expectations following what CEO Alex Whitehouse described as “a really strong Christmas.” The update covered the 13 weeks to December 27 and marked an acceleration in growth compared with the first half of the financial year.
Q3 sales growth accelerates; profit guidance raised
Whitehouse said branded revenue rose 5.2% year-over-year in the quarter, while total group sales increased 4.1%. He added that the company grew market share in both UK grocery and sweet treats, with overall UK share up 22 basis points, and also gained share in Australia.
Brand investment, innovation, and premiumization
Management repeatedly emphasized the role of its “branded growth model,” combining new product development, marketing investment, and in-store execution. Whitehouse said Premier Foods increased brand investment in the second half versus last year and plans to do the same in Q4.
As an example of stepped-up support for smaller brands, Whitehouse said Paxo received advertising for the first time in around 20 years, timed for the run-up to Christmas. He also said the company is evolving its marketing approach to reach younger consumers, including greater use of social media and influencers.
Whitehouse highlighted a “premium indulgence” trend, saying consumers have increasingly traded up into premium ranges such as Ambrosia Deluxe, The Spice Tailor, and Mr. Kipling Signature mince pies, all of which outperformed their categories in the quarter.
Category performance: grocery and sweet treats
In grocery, branded sales increased 5.8% and total sales rose 4.6%. Whitehouse pointed to innovation-driven gains across the portfolio, including:
- Oxo benefiting from new launches such as bone broth and a ready-to-use liquid stock.
- Bisto supported by a new premium ready-to-use gravy.
- Paxo launching stuffing kits shaped like a Christmas wreath.
- Ambrosia boosted partly by continued growth in Ambrosia Deluxe.
- Angel Delight gaining from new bubble jelly pots inspired by bubble tea.
- Nissin delivering double-digit growth led by Demae Ramen, alongside a new “soba protein pots” launch aligned with higher-protein diet trends.
- Batchelors supported by pasta-and-sauce ranges in microwavable pouches.
Grocery non-branded sales fell 7.5%, which management said reflected a deliberate decision to exit two contracts in stuffing and custard.
In sweet treats, branded sales rose 3.1% in the quarter, and sales year-to-date are up 6.9%. Whitehouse said both Mr. Kipling and Cadbury Cake delivered growth, with Premier Foods again outperforming the market and gaining share.
Mr. Kipling’s Christmas performance included a 19% increase in Signature mince pie volumes, supported by wider retailer distribution and the introduction of a two-pack format. Whitehouse also cited growth from innovation, particularly Cake Bites Tubs. Cadbury Cake growth was helped by its core mini rolls range, including new Cadbury Caramel mini rolls launched in the first half.
Non-branded sweet treats sales increased 2%, which the company attributed to contract wins on tarts and seasonal lines.
Strategic pillars: new categories, acquired brands, and international growth
Premier Foods said it continued to progress against its five-pillar growth strategy. Sales from extending brands into new categories increased 29%, following a 38% rise last year. Whitehouse said growth was led by Fuel10K Yogurt and Granola, the company’s “first real foray into the chilled part of the store,” and by Cape Herb and Spice, which gained additional distribution and now has broad coverage across major retailers.
Across acquired brands, Whitehouse said The Spice Tailor, Fuel10K, and Merchant Gourmet all grew sales in double digits during the quarter. The Spice Tailor launched larger family-sized packs and expanded its Thai range with Pad Thai noodles and sauce. Fuel10K saw momentum continue in its granola range and launched a ready-to-eat high-protein porridge pot made at the Lifton Ambrosia Creamery. Merchant Gourmet delivered a strong first full quarter under Premier Foods ownership, supported by increased in-store displays for its chestnut range and strong performance from new “Meals in Minutes” products.
International revenue increased 10% year-over-year, with Whitehouse noting the growth came against tough prior-year comparatives. He said international growth can be “lumpy” due to shipment timing, but reiterated the company’s view that overseas expansion remains a major medium-term opportunity. Highlights included:
- Australia: strong in-market performance from the cake business, with Mr. Kipling cake slices a key driver; further market share gains.
- New Zealand: new listings expected in Q4 across Mr. Kipling and Cadbury Cake.
- United States: Mr. Kipling apple pies performing well in Kroger (in one region), and additional distribution gains for the core slices range; packaging has been adjusted to emphasize “Britishness.”
- Canada: Mr. Kipling slices performing well in Walmart, with a confirmed listing for apple pies.
- EMEA: Fuel10K distribution expanding in Europe, with best-selling granolas expected to be available in Germany, the Netherlands, Portugal, and Italy by the end of Q4.
On costs, Whitehouse said Premier Foods has been seeing low- to mid-single-digit inflation, expects that to continue “for a little bit longer,” and aims to absorb as much as possible while using brand strength to support pricing where needed. He also said Q3 growth included both volume and value, with mix benefits from premiumization.
Management also discussed its increasing capital expenditure plans, saying projects are “very much on track,” focused on cost-out initiatives and “replatforming,” including full production line replacements to improve efficiency, throughput, and quality.
In Q&A, Whitehouse addressed the potential impact of appetite-suppressant drugs, saying the company has not seen an impact and does not expect a significant downside because many products are purchased for family meals. He added Premier Foods may see opportunities through higher-protein and healthier offerings, citing Fuel10K and Merchant Gourmet.
Closing the call, Whitehouse said the company’s strong Q3 performance across brands and strategic pillars supports confidence in its medium-term aspirations, and underpinned the decision to guide trading profit to the upper end of expectations.
About Premier Foods (LON:PFD)
Premier Foods plc, together with its subsidiaries, manufactures and distributes branded and own label food products in the United Kingdom, other European countries, and internationally. The company operates through Grocery, Sweet Treats, and international segments. It offers a portfolio of product categories, including flavorings and seasonings under the Bisto, OXO, Paxo, and Saxa brands; cooking sauces and accompaniments under the Sharwood's, Loyd Grossman, Spice Tailor and Homepride brands; quick meals, snacks, and soups under the Batchelors and Smash brands; ambient desserts under the Ambrosia, Bird's, and Angel Delight brands; and ambient cakes under the Mr Kipling and Cadbury brands.
