Premier Foods PLC (LON:PFD) said it plans to boost investment in brand advertising and new product development after delivering a strong performance.
The Mr Kipling and Bird’s Custard owner expects full-year trading profit to be £145-150mln, up from £132mln delivered in the year to March 2020.
Group sales jumped 9% in the 13 weeks to December 26 as further restrictions meant more people only ate at home, a trend expected to continue in the last quarter of the financial year.
Online sales rocketed 90% and there was higher household penetration for key brands such as Bisto, Oxo and Paxo.
International sales in the period were up 43%, partly helped by a buy-in of products ahead of the Brexit deadline.
The manufacturer launched new products in the quarter, such as Sharwood's low sugar stir fry sauces, and supported five of its major brands with TV advertising.
In the new year, Premier Foods will also sell and market Mr Kipling cakes in the US, with shipments expected in the first quarter, after signing an agreement with Weston Foods.
Analysts at house broker Peel Hunt increased the target price to 130p from 125p and said US expansion plans are “potentially a material breakthrough for the international business and a demonstration that it can become a material growth driver for the company”.
"Current lockdowns should keep demand for its products strong and increasing brand awareness while accelerating sales overseas, should bode well for future growth, even when consumers are freed from their kitchens once more," analysts at Hargreaves Lansdown commented.
Shares slipped 2% to 106p on Tuesday morning.
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