Premier Foods (LSE:PFD) shares rose 4.1% to 205.4p after the Mr Kipling and Bisto maker reported stronger-than-expected annual profits, increased its dividend and said it planned to introduce an interim payout next year.
The food manufacturer said trading profit for the 52 weeks to 28 March rose 6.7% to £200.4 million, ahead of expectations, while adjusted pre-tax profit increased 8.5% to £183.6 million.
Branded revenue rose 3.4% to £1.04 billion, with growth accelerating in the second half as new products, including Mr Kipling cake bite tubs, OXO bone broth and Angel Delight bubble jelly helped drive demand.
Sweet Treats branded revenue increased 7.3%, while total grocery branded sales rose 2.3%.
Profit after tax rose 9.4% to £136.6 million and net debt fell by £48.4 million to £95.2 million despite the acquisition of Merchant Gourmet during the year.
The group increased its final dividend by 20% to 3.36p a share and said it currently planned to introduce an interim dividend in the 2027 financial year.
House broker Peel Hunt said trading profit had come in ahead of forecasts and described the shares as offering “very good value”, maintaining a “buy” recommendation and a 260p target price.
Peel Hunt, another house broker, said trading profit had beaten expectations "due to balanced progress across the firm; innovation, UK share gains, investment benefits, internationalisation and good M&A".
A new interim declaration is coming, "which we like, as we do the expectation for further balanced growth from a firm that is expected to have near net cash balances, so fuelling ongoing options for shareholder benefit, especially inorganic activity."