Premier Foods forecasts a 20% increase in Q1 sales on COVID-19 driven stockpiling

Premier Foods (LON: PFD) said on Wednesday that its sales are likely to come in 20% higher in the first quarter as customers stockpiled ahead of COVID-19 restrictions in the United Kingdom. The company also expressed confidence that its trading profit and revenue in the ongoing financial year will top current estimates.

Shares of the company were about 4% up in premarket trading on Wednesday. At 63 pence per share, Premier Foods is currently more than 50% up year to date in the stock market after recovering from a low of 19 pence per share in March. Learn more about day trading.

Premier Foods reports a 6% growth in annual adjusted pre-tax profit

In the year that ended on 28^th March, Mr Kipling cakes maker recorded £93.3 million in adjusted pre-tax profit that represents a 6% year over year increase. The company, however, remained uncertain of how eating habits of its consumers might change in the upcoming months as the British government continues to ease COVID-19 restrictions.

As per the company compiled consensus, analysts had anticipated Premier Foods to print a marginally lower, £93 million in adjusted pre-tax profit in the recently ended year. The food company had previously reported its sales to have surged 15.1% in the UK in March that had resulted in a 23% growth in its stock.

CEO Alex Whitehouse of Premier commented on the report on Wednesday and said:

“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.”

Premier Foods has reduced its net debt by £61.8 million

According to Prime Minister Boris Johnson, England’s hotels, restaurants, and pubs will be reopened for the public on 4^th July as part of the next phase of relieving COVID-19 restrictions. Premier was recently reported in search of a buyer to offload its stake in Hovis.

Premier also said on Tuesday that it is considering expanding its investment in consumer marketing. Its cost cut programme, as per the food manufacturer, is now likely to deliver broader savings than £5 million that it had originally planned for the next 2 years.

So far, the St Albans-headquartered company has slashed its net debt from £469.9 million to £408.1 million and hopes to further reduce it in 2020.

Premier Foods performed fairly upbeat in the stock market last year with an annual gain of roughly 15%. At the time of writing, the British company has a market cap of £531.24 million.