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Premier Foods swings to a half-year profit as Angel Delight makes a comeback

First half sales rose as a strong second quarter offset a "challenging" first quarter

Angel Delight
A ready-to-eat tub of Angel Delight has been a big hit for Premier Foods

Mr Kipling maker Premier Foods PLC (LON:PFD) swung to a half-year profit as revenues rose on the back of a new range of Super Noodle pots and a deal to produce Cadbury cakes.

Shares jumped 8.90% to 39.74p after the baked goods and food ingredients group posted a profit of £300,000 for the six months to the end of September, compared to a £55.6mln loss last year.

Revenue grew 1.5% to £353.5mln, boosted by partnerships with Cadbury owner Mondelez International Inc (NASDAQ:MDLZ) and Japanese noodles maker Nissin.

In September, Premier signed a five-year deal with Mondelez to continue producing and marketing Cadbury-branded cakes and desserts. The deal allows the company to produce cakes in a further 36 countries.

“We completed the signing of the new Mondelez International Global Strategic Partnership in the first half of the year and through our partnership with Nissin, Batchelors is now the fastest growing major brand in our portfolio following the launch this year of convenient pot format products such as Super Noodle Pots," said chief executive Gavin Darby.

“The Batchelors brand has also benefited substantially from the launch of Pasta ’n’ Sauce pots, another range of convenient quick meals perfectly suited to today’s time-conscious consumer.”

Angel Delight makes a comeback

The group also launched a convenient ready-to-eat pot of Angel Delight, which helped push sales of the whipped dessert up 30% in the first half.

The original form of Angel Delight, first launched in 1967, is packaged in powder form that needs to be whisked with milk.  

A tub that allows consumers to eat Angel Delight on the go has led to a comeback of the brand.

Darby said its first half sales growth was driven by a strong second quarter, up 6.2%, offsetting a “challenging” first quarter.

Expectations for the full year were unchanged.

Premier Foods Q2 performance 'pleasing', says ShoreCap

“Premier Foods, the UK's No.4 food manufacturer in size by sales, has had a colourful and somewhat varied history as a listed entity, delivering much disappointment over the last decade or so for its shareholders,” Shore Capital analysts Clive Black and Darren Shirley said in a note to investors.

“Well, let the bunting be brought out of the fusty 'better news bunting box', because today there is little disappointment and, in fact, better news of Q2 FY2018 trading.”

ShoreCap said it was "pleasing" not to be recording disappointment and more stress from Premier but left its rating at ‘hold’ as it awaits the group’s Christmas trading figures. 

Quick facts: Premier foods

Price: 42 GBX

LSE:PFD
Market: LSE
Market Cap: £355.6 m
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