Premier Foods restores dividend after thirteen years

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on May 19, 2021
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  • Premier Foods declares 1 penny per share of a dividend on Wednesday.
  • The food firm's full-year profit and revenue comes in better than expected.
  • Premier Foods is more than 5% up year-to-date in the stock market.

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Premier Foods plc (LON: PFD) restored its dividend on Wednesday after thirteen years as full-year profit and revenue came in better than expected. The company attributed its hawkish performance to the COVID-19 restrictions that resulted in higher demand for its Bisto gravy and Oxo stock cubes.

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Premier Foods opened at 104.20 pence per share in the stock market on Wednesday and is currently exchanging hands at 105.86 pence per share. In comparison, it had started the year at 99.40 pence per share and had tanked to a year-to-date low of 88.30 pence per share in late February.

Premier reports £115 million of annual pre-tax profit

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Premier Foods reported £115.3 million of annual pre-tax profit on an adjusted basis that represents a 24% year over year growth. Its revenue printed at £934.2 million in the year that concluded in April.

In comparison, experts had forecast £112 million of adjusted pre-tax profit and £926 million of full-year revenue. The food manufacturer noted a 23% increase in revenue from its international division.

Premier’s board approved 1 penny per share of a dividend on Wednesday. To refinance its debt, the British firm also issued a new £300 million (5 years) note. Commenting on the financial update on Wednesday, Shore Capital analysts said:

“Set against a troubled decade, FY2021 has been positively transformational for Premier Foods as management continued to harvest the benefits of focus, simplification and careful, nay constrained, brand development.”

In separate news from the United Kingdom, pub operators Marston’s and Mitchells and Butlers reported wider losses for the fiscal first half.

Premier Foods to introduce a new range of sauces

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The owner of prominent brands like Mr Kipling intends to introduce 30%-less-fat Loyd Grossman lasagne sauces and a vegan range of Sharwood’s Indian cooking sauces in a bid to expand its footprint in the healthier choices category.  

As the Coronavirus restricted people to their homes, an increase in home cooking resulted in an over 100% growth in Premier’s online sales. The company expressed confidence that it will match profit guidance this year. In the prior quarter (Q3), the St Albans-based company had posted a 90% increase in digital sales.

Premier Foods performed massively upbeat in the stock market last year with an annual gain of more than 150%. At the time of writing, it is valued at £911.15 million and has a price to earnings ratio of 11.79.

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