Premier Food revenues fall as dessert sales fall flat


Premier Foods has reported a dip in first quarter revenues after a combination of warm weather and lacklustre dessert sales dragged on its performance.

The Mr Kipling cakes firm saw sales fall 3.1% in the 13 weeks to July 1, due in part to fewer consumers buying Ambrosia.

"Ambrosia sales were noticeably lower as changing promotional mechanics resulted in lower than expected volumes in the quarter," Premier said.

It added that revenue was adversely impacted by a warmer June and "lower promotional effectiveness" in its desserts division.

However, international sales rocketed 20%, with Cadbury cake sales in Australia a major contributor.

Boss Gavin Darby said: "Our first quarter sales were lower than last year, as we expected, primarily due to lower sales volumes in the grocery categories, notably desserts.

"At the retail level we have continued to outperform our markets and industry peers, our international business grew 20% in the quarter, and our cost savings programmes are on track."

A partnership with Japanese noodle-maker Nissin Foods has delivered more than £3 million of retail sales, the firm added.

The group, which also owns a raft of household brands including Oxo and Batchelors, has recently been stung with surging costs of commodities such as sugar, chocolate, dairy, wheat and palm oil, as well as the collapse in the pound.

In January, the firm warned over profits and said it plans to slash costs throughout its supply chain.

It expects to deliver savings of £10 million this financial year.

Mr Darby added: "We expect to report positive sales growth in the second quarter, broadly flat sales in the first half and our expectations to deliver progress in the full year are unchanged."