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Premier Foods says first quarter sales fell but stays confident of growth ahead

Published: 10:34 20 Jul 2017 BST

confectionary
While the grocery market remains competitive, the company has driven market share gains in its key brands

Premier Foods PLC (LON: PFD) said sales in the first quarter fell in line with expectations but added that it remains confident of growth in the second quarter through gains in market share and pricing.

In a trading update for the 13 weeks to July 1, Premier Foods said sales in the first quarter were 3.1% lower than the prior year, with a good performance in Sweet Treats held back by lower sales in branded grocery.

READ: Not such a sweet year for Premier Foods as profits slide

The company, which owns the Mr Kipling brand, said it anticipates stronger trends in the second quarter and is beginning to see changes in multi-buy promotions, which impacted its grocery volumes in the second half of last year.

It said: "The group remains confident of delivering positive sales growth in quarter two and broadly flat sales for the first half, assuming normal UK temperature trends."

While the overall outlook in the grocery market remains competitive and challenging, the company said it has driven market share gains in its key brands, Bisto, Batchelors, Loyd Grossman, Mr Kipling and Cadbury cake in the first quarter, and that these improvements underpin confidence for the remainder of the year.

Premier Foods CEO, Gavin Darby said: "Our first quarter sales were lower than last year, as we expected, primarily due to lower sales volumes in the grocery categories, notably desserts.  At the retail level we have continued to outperform our markets and industry peers, our international business grew 20% in the quarter, and our cost savings programmes are on track."

He added: "We expect to report positive sales growth in the second quarter, broadly flat sales in the first half and our expectations to deliver progress in the full year are unchanged."

In midmorning trading, Premier Foods shares were up 0.50p at 39.25p, a 1.29% rise.

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