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Investing.com -- Premier Foods (LON:PFD) shares fell more than 3% on Thursday after the company reported a slowdown in sales growth for its fiscal first quarter, citing reduced demand for its grocery products during unusually hot weather.
Group sales rose 0.3% in the quarter, down from a 2.1% increase in the previous quarter.
The company said its Grocery division recorded a revenue decline of approximately 2.7%, compared to 1.4% growth in the prior period. Branded Grocery revenue fell 2%, reversing a 2% gain in the previous quarter.
The company attributed the shortfall to lower demand for products such as gravy, soup and stock during a period of higher-than-normal temperatures.
Premier Foods estimated that branded Grocery sales were negatively impacted by about five percentage points due to the weather during the quarter.
Sweet Treats revenue offset some of the decline, rising 9.1%, compared with a 5.3% increase in the previous quarter.
Branded revenue in the division rose 11.4%, supported by the performance of new products including Mr Kipling birthday cake tarts. The company said the product was performing "very strongly."
Premier Foods said its full-year fiscal 2026 trading profit expectations remain unchanged.
The company continues to expect branded revenue to build through the year. New product sales rose 38%, while acquisitions including The Spice Tailor and Fuel10K delivered double-digit growth.
International revenue rose 5%, though the company noted the figure was affected by timing factors. Premier Foods also reported further market share gains in the quarter.
Full-year revenue for fiscal 2025 was £1.15 billion, up from £1.14 billion a year earlier. Branded sales totaled £1.01 billion, or 87.8% of total revenue. Trading profit rose to £187.8 million from £177.2 million.
The Grocery division accounted for £229.4 million in trading profit with a 27% margin, while Sweet Treats contributed £35.4 million at an 11.8% margin.
Net income for fiscal 2025 rose to £124.9 million from £112.5 million. Adjusted basic earnings per share increased to 14.5p from 13.5p. The dividend per share rose to 2.8p, up from 1.7p in the previous year.
Capital expenditure rose to £33.5 million from £24.7 million. Cash at year-end stood at £191.5 million. Net debt, excluding lease liabilities, fell to £133.7 million from £223.4 million a year earlier.
Premier Foods maintained its forecast for fiscal 2026, projecting revenue of £1.18 billion and trading profit of £195.2 million. Branded sales are expected to total £1.05 billion.