StockMarketWire.com - Mr Kipling cake and Oxo stock cubes maker Premier Foods swung to a full-year profit, after it boosted sales and its bottom line wasn't dented by asset writedowns posted in the previous year.

The company also said it expected to beat revenue and earnings expectations for the current financial year, amid a surge in demand for cooking ingredients during Covid-19 lockdowns.

Pre-tax profit for the year through March amounted to £53.6m, swinging from a loss of £42.7m on-year, when the company wrote down the value of some brands.

Revenue rose 2.8% to £847.1m and trading profit rose 3.2% to £132.6m, which the company said was at the top end of market expectations.

Net debt was cut by £61.8m to £408.1m

'This has been a period of considerable progress for the company,' chief executive Alex Whitehouse said.

'We recently concluded our strategic review with a landmark pensions agreement which has the potential to significantly reduce future funding requirements for the group.'

Whitehouse said the company had lowered its debt to operating earnings ratio to 2.7 times, beating its previous 3.0 times target.

'During the outbreak of Covid-19, food has been identified by the government as a key industry and we feel privileged to play our part in keeping the nation fed,' he added.

'One of the most prevalent trends we have seen during the lockdown is that Britain has got cooking again, with particularly high levels of demand for items relating to meal preparation, including cooking sauces, gravy and baking ingredients.'

Revenues in the first quarter of the 2021 financial year were expected to jump 20%, reflecting continued strong for grocery products.

'Consequently, we expect to exceed current expectations for revenue and trading profit despite incurring some additional operating costs in our supply chain,' Whitehouse said.

'Our options for cash deployment and capital allocation will improve as a result of expected further net debt reduction in the 2021 financial year.'




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