Earnings call transcript: Premier Foods Q1 2025 sees sweet treats boost sales

Premier Foods PLC reported its financial results for the first quarter of 2025, highlighting a modest increase in branded sales and a notable rise in sweet treats sales. The company’s stock saw a decline of 4.14%, though InvestingPro data shows a healthy 13.45% total return over the past year. With a current P/E ratio of 5.2 and a dividend yield of 6.55%, the company maintains strong fundamentals despite recent market reactions.

Key Takeaways

• Branded sales increased by 1.2%, driven by sweet treats.
• International sales grew by 5% in constant currency.
• Grocery branded sales fell by 2%, impacting overall performance.
• Stock price dropped by 4.14% following the earnings announcement.
• Trading profit expectations for the full year remain unchanged.

Company Performance

Premier Foods demonstrated resilience in its Q1 2025 results, with a 1.2% increase in branded sales primarily fueled by the sweet treats segment, which surged 11.4%. While the company faced challenges in its grocery branded and non-branded segments, which declined by 2% and 9.3% respectively, overall revenue growth reached 4.22% in the last twelve months. The international market showed promise with a 5% sales increase in constant currency, reflecting successful expansion efforts in Australia, Canada, and the US. According to InvestingPro, the company maintains strong financial health with a GOOD overall score of 2.86, suggesting robust operational efficiency.

Financial Highlights

• Branded sales: Up 1.2% year-over-year
• Retail sales: Up 0.3% year-over-year
• Sweet treats branded sales: Up 11.4% year-over-year
• Grocery branded sales: Down 2% year-over-year
• Non-branded grocery sales: Down 9.3% year-over-year
• International sales (constant currency): Up 5% year-over-year

Market Reaction

Despite the positive growth in certain segments, Premier Foods’ stock fell by 4.14%. With a beta of 0.7, the stock shows lower volatility than the broader market, and InvestingPro analysis reveals several positive indicators, including a strong current ratio of 1.93 and consistent dividend growth. Unlock 8 additional ProTips and comprehensive financial analysis with an InvestingPro subscription, including exclusive access to the detailed Pro Research Report covering Premier Foods among 1,400+ top stocks.

Outlook & Guidance

Premier Foods maintained its trading profit expectations for the full year, anticipating double-digit growth in international markets, particularly in the latter half of the year. The company plans to continue its focus on innovation and brand expansion, with new product launches such as Mr. Kipling Signature Brownie Bites and Mexican cooking kits. Additionally, Premier Foods is exploring potential inorganic growth opportunities to bolster its market position.

Executive Commentary

Alex Whitehouse, CEO of Premier Foods, stated, "We are on track, and our trading profit expectations for this financial year are unchanged." He also emphasized the company’s commitment to health-focused product development, saying, "We’ve been quite supportive of the health agenda. We see it as both a moral responsibility and a commercial opportunity."

Risks and Challenges

• Decline in grocery sales could continue to impact overall growth.
• Market volatility and consumer spending shifts may affect future performance.
• Dependence on weather conditions for certain product categories like gravy and soups.
• Potential impacts of GLP-1 drugs on consumption patterns.
• Competitive pressures in the international market as expansion continues.

Premier Foods remains optimistic about its growth prospects, particularly in the international arena, while addressing challenges in its grocery segment and adapting to evolving consumer preferences. The company’s financial stability is reflected in its moderate debt levels and strong liquidity position, as highlighted in the comprehensive Pro Research Report available exclusively on InvestingPro.

Full transcript - Premier Foods PLC (PFD) Q1 2026:

Harry, Conference Call Operator: Hello, everyone. And thank you for joining the Premier Foods q one trading update analyst conference call. My name is Harry, and I’ll be your operator. All lines are currently in listen only mode, and there will be an opportunity for q and a after management’s prepared remarks. If you would like to enter the queue for questions, please dial followed by one on your telephone keypad.

And I would now like to hand the call over to Premier Foods CEO, Alex White house, to begin. Please go ahead. Thank you very much, and good morning, everyone. Thanks for joining us for our quarter one trading update call, and that covers the thirteen weeks up to the June 28 this year. Joined on the call this morning as usual by Duncan Leggett, our CFO.

And I’ll start by giving a few headlines on our trading in the quarter, and then we’ll dive into a few key areas to provide a bit more detail before, as usual, passing to you for your questions. So as a reminder, by the way, we’re holding our AGM at midday today, which we’ll be hosting at our offices here in St. Alden. So if any shareholders would like to attend and you don’t have the details, please do contact Richard Gordon in our investor relations for details of how you can attend. So once the quarter one results spend, and firstly, I’m I’m pleased to say that we’ve grown our branded sales again in quarter one, and we’ve also increased our market share.

So branded sales were up 1.2%, and that was led by a particularly strong performance in branded free treats, which was partially offset by some of our grocery brands, which were held by by the unusual hot weather that we’ve been having. So overall, our retails were not point 3% higher than last year. And you may recall, we’re also lapping some very strong comps. But as a reminder, grocery branded sales were up 8.6%, and total branded up 7.3 last year. So our market share continued to grow both volume and value market share.

You might also recall that last year, we delivered some particularly strong volume share gains as we sharpened some of our promotional price points. So taking further volume share this quarter against that strong comparative was was very encouraging. I’m also pleased to say that we’re on track at this early stage of the year with our trading profit expectations for the full year unchanged. And so let’s take a look at some of the progress in this first quarter. But before I do, I just like to remind you of our brand and growth model, which is at the core of what we do and is the reason why we’ve been able to deliver such consistent strong performance over the last six years or so.

And so so firstly, we’ve got a portfolio of strong brands, which are leaders in their categories, and have got very high household penetration. But we then listen very carefully to our consumers so that we can create and bring to market insightful new products, which are based on current consumer needs and trends. And then we support many of our brands with the mostly engaging advertising and impactful marketing campaigns, which in fact, we’re currently evolving to incorporate more digital media and leveraging influences on some of our brands. And then finally, and but very importantly, we work closely with our key retail partners to make sure that we’re delivering excellent in store execution for our brands. And it’s this branded growth model that underpins our five pillar growth strategy.

But we continue to make strong progress in all the pillars, and but I’ll come back to that shortly. So let’s start with our three treats business first where we’ve had a really great quarter here with branded sales increasing by 11.4%. And a significant part of that growth is being driven by the quality of innovation program that we’ve got in place, which is obviously a key part of our strategy. And, however, I should point out that the underlying core business also continued to perform very strongly. In terms of some of the examples of new products, I have spoken about our Mr.

Kippley signature brownie bites before, and they’ve been performing very well over the last year or so, tapping into the indulgence consumer threat. And they continue to deliver further growth for this quarter as well. And we’ve also launched Mr. Kipling lunchbox slices in quarter one, which is being specifically designed to be less than a 100 calories so that they can be included in school lunch boxes. And they’re also, of course, non HSS, so not high in fat, salt, sugar.

But one of the big highlights of free treat this quarter has been the success of birthday cake tart and also strawberry and cream tart. These birthday cake tart have been inspired by a trend that we’ve seen in The United States for birthday cake and the flavor, not just for the cake. And we’ve replicated this with some small parts, which has done incredibly well since we launched them a few months ago. And we’ve also introduced the caramel version of our leading Cadbury mini rolls, and that’s also performed very well, and that helps our Cadbury sales as well as mister Kittling sales increased by double digits this last quarter. Looking forward to the next quarter and beyond, we’ve launched mister Kittling breakfast bakes, contain fiber and have got 30% less sugar than SimplerCake, and that’s a perfect on the go solution that we further expand our breakfast offering.

And so moving on to the grocery business. So this quarter, our grocery branded sales were 2% lower than the same period a year ago, but they lacked some strong comparatives. And, also, some of our grocery categories were impacted by that warmer, sunnier weather we’ve been having here in The UK compared to what was actually quite a cool down spring last year. From our experience, there were a few specific categories which can be impacted by warmer or or indeed colder weather, and that’s things like gravy, stocks, and soup, and also desserts that cost us to to an extent too. But we tend to see more of an impact in the shoulder seasons.

So a warmer spring or autumn can be more impactful. And likewise, a cold spring or autumn have the have the opposite effect. However, this is very much a short term factor. We don’t see any read across on a medium to long term basis. So everyone’s aware, and by the way, we we’re on a journey to deseasonalize the business and reduce the impact of weather.

So, for example, we take this into consideration in our m and a strategy, and you can see that both the Spice, Taylor, and FuelPrem k, which have got have got little or no weather sensitivity. And also, as we grow our business overseas, this will reduce the impact of short term UK weather effects. Now if we look to the second half of the year for our grocery brands, we’ve got some particularly strong innovation to come, such as Bisto, Peri Peri, Gravy, which aims to bring more younger consumers into the category, and also the continued rollout of Bachelor’s new microwavable ranges, which includes Pattern Source and also what we’re calling meals and minutes. Moving to the non branded part of the business. Non branded grocery sales were 9.3% lower in the quarter.

We continue to right size this part of the business, and we exited a couple of contracts in customer consult. However, we also saw consumer switching from our own label desserts in front of us, which is obviously exactly what we want to see. One branded sales in street treats declined by 5.5%, which is also largely due to some contract taxes. And while the nature of these non branded contracts contracts can mean the business can be quite lumpy on a quarter to quarter basis, as we look forward to the second half of the year, we expect non branded sales for both grocery and sweet treats to start to flatten out. That’s a little more broad in the progress we’ve made on our other strategic pillars.

It remains very encouraging. So you’ll remember that one of those pillars is expanding our brands into new categories in The UK, And I’m pleased to say that we’ve continued the strong momentum in those new categories with sales up 38% this quarter. And this further momentum was again led by our pros and cons, but it leverage further distribution gains in both the major multiple retail and large stores, but also now into convenience stores as well. And and they now also have five flavor variants in the market too. And perhaps not surprisingly, Polly’s Pop is again continued to deliver continue to deliver significant market share gains.

As a reminder, I’m reflecting the success of Polish parts. We’re also in the process of laying down some additional capacity for Polish parts at our manufacturing site in Devon. Another key driver of the new category’s growth in the quarter was cake, herbs and spice, which is really becoming an established presence in the market, but it benefits from increased distribution from the range of what is now full b retail SKUs. And we also go through in food service as well. The Cape range is extremely versatile.

It’s great at bringing great flavor to liven up a wide variety of dishes, including poultry, fish, salad, and ribs, and also a complimentary midweek evening meal. And also, of course, the barbecue season, which will have benefited from over the last few weeks. So growth from new categories also included the expansion of Fuel 10 k into mainstream big box cereals with products such as multigrain flakes and multigrain hoops. And these are all protein enriched in line with the rest of the fuel 10 k range. It’s early days for this range, but we can already see that they’re bringing younger consumers back into the traditional cereals category.

And as we look forward to quarter two and beyond, we’ve got a strong set of plans for new products in new categories, and this includes the launch into the chilled aisle with fuel pancake, yogurt, and granola pots. So adding to the breadth of our breakfast offering. And we’re also expanding our Angel July ice cream range with what we call handheld twists, and then in strawberry and vanilla and then both cotton chocolate flavors. Let’s now move on to international. As I said before, our focus markets are Australasia, North America, and EMEA.

And within these target markets, we’re currently focused on Mr. Kipling, Shawwood, and the Spice Taylor brands. So in the quarter, overseas sales of constant currency grew by 5%. So again, going ahead of our UK core. In Australia, we grew sales double digits with further good progress in cake and cooking sources.

And both our cake and cooking source brands continued to perform really well in market and driven by the continued execution of our brand of growth model as we further build on our market leadership positions. You may recall that we’ve advertised both mister Kipling and Spike Taylor on TV in Australia recently, and we continue to to introduce new products to market as well as maintain strong relationships with the retailers there. And sales also grew very strongly in Canada as the sales of mister Kipling continued to build, partly due to the increased distribution that we gained last year. And in The US, we’re updating the mister Kipling range accentuating the Britishness of the product range with pack designs that include iconic British images such as Big Ben. I’ve mentioned before that our research suggests that US consumers believe that British cakes will be of higher quality.

And then just as a reminder, our final strategic growth pillar is to look for inorganic opportunities where we can deliver further growth by leveraging the strength of our branded growth model. And that was a key principle we applied when we assessed the fit of both Spice Taylor and FuelPEN k. And both of them increased UK sales in double digits this quarter compared to a year ago. Spice Taylor has benefited from increased sales from the East Asian cooking source kits and that we’ve launched our Chinese cooking source kits that which we launched during last year. So these are authentic product flavors such as Japanese teriyaki, Vietnamese curry, and classic sweet and sour sauce.

And now to build on the cuisine extensions, we’ve just launched into Mexican with our new Mexican kits with flavors such as smoky barbecue fajita and chipotle and lime fajitas. And fuel tank hay had an exceptionally strong quarter, and that was helped by a series of new products we’ve launched recently, extending the brand into a number of different categories. And and all of these are, of course, high in pricing, which is a central part of the brand’s proposition. These new products include instant noodles, a range of instant soups, and protein bowl pouches. And this very latest policy is yogurt and granola pot, which have gone into market just a couple of weeks ago into the chilled aisle.

And this is a pot with protein and mixed yogurt with a lid containing some of our market leading two ten k granola to sprinkle on top or indeed to make sense. And as we said before, we’ll continue to explore further inorganic opportunities where we believe that we can add value by applying our brand of growth model. Of course, we’ve now got greater flexibility in terms of the size of opportunities we can consider, given the strength of our balance sheet. However, and also as we’ve said before, we are quite picky. We’ll update you when we’ve got anything more that we can share.

So in summary, we’re on track, and our trading profit expectations for this financial year are unchanged. And it’s particularly pleasing to see the really strong growth in sweet treats, which is a strong testament to the value that we’re delivering from our branded growth model, albeit partly offset in q one by the hot weather impact on some of our grocery categories. And as we look forward to the rest as we look forward to the rest of the year, we expect to see the strong competitive ease and revenue build as we leverage the strength of our brand and growth model. And then, of course, we’ll be continuing to support our brands and bringing a number of new products to market as well as building further the distribution of our brands and to see. And over the medium term, we expect to continue to make strong progress against all five of our strategic growth pillars.

So thank you very much for your time. I’ll now pass back to the operator, We will be very happy to take your questions. Thank you. If you would like to ask a question, please dial followed by 1 on your telephone keypad now. If you change your mind and would to exit the queue, please dial followed by 2.

And finally, when preparing to ask your question, please ensure that your device is unmuted locally. As a reminder, that is star one to enter the queue for questions. Our first question today will be from the line of Matthew Abraham with Berenberg. Please go ahead. Your line is now open.

Morning all. Thanks for taking my questions. First question just is in reference to innovation. So you spoke to the success of innovation in q one. Is it possible to provide some, you know, some quantification of innovation to come for the remainder of the point of view, whether that’s the number of new SKUs and and how that compares to the degree of new products that’s been launched in the quarter just gone?

Thank you. Hi. Thanks, Matthew. Yeah. So, I mean, obviously, innovation is is really important for our model.

We know that there is a very strong correlation between long term brand growth brands which have got the ability to consistently innovate. And that’s why we call so much focus on it, to be honest. In terms of balance to go, I can’t quantify it, unfortunately. No. The the reason for that is the way we’re increasing our overall innovation output is not by throwing more and more SKUs into the market because, frankly, there’s a bit of room for them on the shelf.

It’s actually by increasing the overall revenue potential of the things that we do launch. So this is all about how the marketing team, you know, down in the engine room develop ideas working with consumers, which have got hundreds of bigger potential. And when I look at our balance to go this year, I I just think we’ve got a particularly strong and exciting lineup of new products. Many of which I I don’t really want to talk about yet because I don’t want to give away commercially what we’re about to do. But by the time we get to the half year, I’ll be able to share more of the things that we’re that we’re doing.

I mean, the one that’s the one I pull out now that we’re quite excited about is the fuel 10 k. You’ll get pops with the with the granola on top. But there’s there’s lots of things coming across the other categories as well a little bit later in the year. It’s just just waiting for when the retailer do their shelf shelf relay. Okay.

Understood. Thank you. And just one more. So next question just in reference to margin. With mix changes due to impacts from weather, is there a broader group margin impact from a change in that mix?

Well, we’ve got slightly different margins on some of the categories. So things can move around a little bit, but, you know, you’ll note today that we’re saying that we’re, you know, we’re on track for our way of trading profit for the for the year, so there’s no there’s no major issue. Okay. Understood. I’ll pass it on.

Thank you. The next question today will be from the line of Matthew Webb with Investec. Please go ahead. Your line is open. Thanks very much.

Good morning. The first question, can we just start off with that that Sweet Treat growth number 11.4 for for the branded Sweet Treat? It’s clearly a a terrific number. Would it be possible to give us a rough breakdown of that between volume, price, and mix? And also, it’s possible and clearly, innovation was quite a big well, I would imagine innovation was quite a big contributor as well.

Is it is it possible to to break out the the contribution of of innovation as well, please, just to to sweet treat specifically? That’s my first question. Thanks. I don’t have very specific numbers to hand, Matthew. But what I can tell you is that the innovation played a very big role in that growth.

But but the reason why it was so powerful is because the core grew as well. So we got good growth out of the core and and kind of business and then some really powerful MPD that came on top. Hence, why you get to such a, you know, such a powerful number. And I think that was coupled with also some really great execution in store. So we had a big a big in store event centered around our our partnership with Roald Dahl, and that led some really big displays in store at the same time.

So really everything coming together and working and working really well. In terms of volume, price, and mix, I can not I don’t have the number, Tom, but what I can tell you is that there is some price in it definitely because we increased our prices at the back end of of last year. So there’s definitely a price component. And from a market share point of view, we took volume share and the value share, which probably give you some indication that it was, you know, driven by by by some of each. Got it.

And and then just maybe a bigger picture question about the cake category. I I guess the perception out there is that it’s on the wrong end of some structural changes in consumption. But, clearly, it was a very strong point for you in the period and, you know, you I think you mentioned that the category grew in the period as well. Mean, what what what do think the medium term prospects are for the cake category as as a whole and for you within it? We’ve always found that the cake category is one of our most elastic categories.

And by that, I mean, it’s it’s very sensitive to when we get it right. So if we get the innovation right, we get execution in store right, we see disproportionate gains compared to some of our other customers. And and I think the reason for that is, you know, some of our products are tied to specific meal occasions. So I’m only going to use a pasta sauce if I’m having pasta for dinner. Right?

And if I’m having something else, then I don’t need it. Whereas cake is something that you can you can eat, you know, no matter what you’re having for dinner and people tend to put them on the countertop at home and and they get kind of hoovered up by the family as they go back. So I think when we get it right on cake, we see, you know, disproportion of these long performance, which I think is exactly what we’ve seen here in q one. So in terms of long term outlook, we’re we’re we’re we’re pretty, you know, pretty positive on it, to be honest. Got it.

Thank you. And then final question. The international figure, the the growth of 5%, I I guess, looks maybe a little bit disappointing compared to some of the rates you’ve you’ve posted in the past. I mean, is that a fair reflection of the underlying growth in the period or whether whether any companies are now around? I know you said that Australia grew double digits, so presumably something else was was going the wrong way.

What what was going on there? Yeah. Sure. So, I mean, you know, we’re still, you know, we’re still really positive on on the the international growth prospects. We would expect to be in double digit growth over the full year, although that does feel a little more back end weighted for us.

In quarter one, yeah, we have some great performance in Australia. We we had a really strong growth on both on both of our key categories, Coke and and also Indian cooking sources, we took really strong market share gains as well, actually, on both those both categories. And and Canada continues its, you know, kind of strong building in performance. Where we focus on turning off of this direction is where we just got, frankly, lumpiness in the supply chain because this is a store actually not that big. And so consequently, when you’re shipping stuff over long distances, the difference between when a container ships and how much stocks in the market can create a bit of a concertina effect.

So we’ll ship a load of stock and get a load of stock in market, and there’s a, you know, a bit of a a pause, but I guess, consume them, then we ship then we ship some more. And I think that’s that’s some of what we saw in the in the quarter in some markets. And and also, I think it’s also fair to say we and, you know, we’ve had to change our distributor in The Middle East. So we did have a bit of a a period of time where we’ve not really sold anything in The Middle East while we’re exiting one distributor moving to another. So so we’ve got temporary effects, which is why we still expect to be double digit for the full year.

Got it. That’s really fair. Thanks very much, Andy. The next question today will be from the line of Karim Elias with Barclays. Please go ahead.

Your line is now open. Thank you for the presentation, and thanks for taking my question. Obviously, your bond are due in October 2026. Just wondering whether you’ve got any particular plans to adjust those and whether the bond market would still be your favorite route for those. Thank you.

Yeah. Good morning, Graham. Thanks for the question. Yeah. Just I think I’m I mean, I’m seeing my bonded bonded bonded on 2026.

I think as you said at the year end, we’ll be looking to, you know, needing to rebalance it probably over the next nine, twelve months or so. That very much remains the balance where we continue to monitor the market. I think the bond market is typically working pretty well for us previously. We’ve been able to the market and, you know, it’s been a different position than

Speaker 1: it was when we put the current bond in place three and

Harry, Conference Call Operator: a half percent. So we’ll we’ll keep an eye on them, and probably we’ll be to

Speaker 1: see something over the next nine to twelve months.

Harry, Conference Call Operator: Thank you. The next question today will be from the line of Andrew Ford with Peel Hunt. Please go ahead. Your line is now open. Morning all.

Thank you for taking my questions. A couple from me, if if I can. And just on on the grocery number and the the the negative number there, can you give a bit more detail on the performance? Yeah, I guess, how some of the less seasonally relevant products performed versus the ones that, you know, you called out in terms of gravy and and stocks, etcetera, that you’d expect to be a bit weaker given the the warm weather. And maybe as well, you you’ve obviously become less seasonally dependent as you’ve as you’ve as you’ve grown, you know, through your through your brand building.

I I wondered how much further you can go given the current portfolio you have or if it would require, you know, more of a yeah. I guess, a widening of the cap rates, relying on acquisitions, or is there product changes you can make in order to to to improve that? I’ll start with that one, and I’ll I’ll put one more if I can. Good morning, Andrew. So yeah.

I mean, within grocery, as I say, there are some categories which, you know, are particularly sensitive to weather. And, you know, this quarter is for the worst, but some quarters is for the better. Right? So, you know, there would be obvious things like gravy and stock and and stuffing because, you know, those categories in what we call flavors and seasonings, know, if you’ve got the barbecue out and you’re having salads, you, you know, you’re you’re not having a roast dinner. So there’s there’s an obvious there’s an obvious impact there.

But then we’ve got, you know, things that go have have continued to march on, you know, in respect of that. So we have really strong growth from the spice trailer. We have really strong growth from fuel 10 k. Breakfast was was really strong because that’s not weather sensitive. So things like granola are not are not weather sensitive at all.

Leasing performed really well with further double digit growth. So, you know, there were a number of things which were going in in the right direction, which are the things that you would expect are not are not weather sensitive. And So we are significantly less seasonal and weather sensitive than we than we used to be. And that’s for a number of reasons, I think. Well, firstly, we’ve got a more robust business model than we would have had, you know, six, seven years ago.

You can see that in the strong growth from the Cape business, I think. Secondly, the new category entries we’ve made have tended to be either seasonally neutral or actually seasonally inverse. So I think about things like cake, herbs, and spice, which delivers more than 60% growth in the in the course with people, you know, sprinkled it on stuff they were putting on the barbecue. And then the the brands, as you point out, the brands we bought. So we we sort of take this deseasonalization concept into account on all those things.

And over time, you know, we will do further deseasonalizing the business, you know, at a at a structural at a structural level. I think we’ve made an awful lot of progress over the last five or six years, is, you know, why we’re still looking at positive branded growth despite the the really hot weather that we’ve just had. And the cat forward, you know, over the next three, five years, we keep doing the same. It’ll it’ll it’ll it’ll just, you know, make it even more robust. So that’s very much the plan.

Well, I should also ask, by the way, because I mean, when the weather’s cold, it works for us that way. Yeah. Absolutely. Thank you. Just one more.

Just on the on the trading up in the brand, and and and you made a a a comment there. Is there I think I think it’s more in the in the in the sweet treat side. Are there any other notable kind of moves into that? It’s from non branded into into branded that you that you’re that you’re seeing. Yeah.

Anything worth worth calling out with that with that trend? Yeah. I’ve pulled I’ve pulled out desserts as well where we’re seeing, know, sales moving from non branded desserts into unraveling. That’s that’s that’s been a trend we’ve we’ve been going on for for probably eighteen months or so now and it’s it’s not it’s not stopped. Right.

Thank you very much. That’s all for me. That’s been possibly hella tested, by the way, by the unbraided deluxe launch. Remember, we’ve got unbraided deluxe we talked about at the full year, which has done incredibly well and and continues to do so. And I think that just drags people up in general.

Thank you. And the next question will be from the line of Clive Black with Shore Capital Markets. Please go ahead. Your line is open. Thank you.

And thank you for taking the questions, gentlemen. One now I want to start off with. Would it be fair to say that your trading expenses in Ireland mirror those of The UK, given you’ve got a much broader assortment in that market? And and across the Atlantic, maybe just give us some color on how things are progressing in Canada, which has, I think, a little bit more rate profile as a as your results. And then in a much more much broader base, that’s building on Matthew’s question.

Yeah. First of all, the UK government has issued updated news on its own food strategy, particularly around HFFF’s food. And we’ve seen a lot or heard a lot of noise about GLP bonds and outside types of drugs in the market, more so stateside than here. But, you know, interestingly, recent updates from Domino’s and Greg’s have contained some of that story. There’s a certain irony in your sweet treats blowing them, you know, blowing the mindset in q one.

But are you seeing and is your business strategy evolving around appetite for that drug as well to the extent that this the natural start be starting to more notably feature in the market UK market. Thank you. That’s right. Quite yeah. Quite a bit of impact there.

So Ireland, yes, there’s there’s a similar there’s there’s, you know, certainly a similar impact having an island in the The UK from a weather point of view. But it’s it’s it’s not that big for us, to be fair. Mhmm. I would say population, but yeah. So I don’t know if America’s a bit though.

Yes. In Canada, we we do have we are doing really well in Canada. And I think some of this is we’ve been there for longer than we’ve been in in fact since then. Mhmm. And it’s kinda working then after Australia.

So there’s a little bit of the way we kinda like to think about it is that these markets are following the pattern. So, obviously, we are delighted with where we are in Australia, where we’ve got leadership in the first two categories, but we’re starting to move our elbows out now and expand into additional categories, fully established business, team on the ground, you know, running the full brand building model. So Mhmm. You know, that’s what that’s the blueprint. But we do need to bear in mind, of course, that it’s a quite a simple market because it’s got two key retailers.

Yeah. And then, you know, next kind of the line was really Canada. So we’ve been there a little while now. We really have started to pick up momentum, picked up some some big chunks of distribution, particularly in Walmart last year. So we’ve got really good effects of mister Kipling in in Canada following that initial test.

If you remember that format, that’s when we first tested case in. Okay. And retail structure is not overly complex. It’s not dissimilar in terms of for The UK, really, where you’ve got a handful of decent sized retailers. They’re not not like Australia, but also very much not like either.

And in The States, we’re, you know, we’re we’re obviously further behind that. Think in the in The States and in Europe, we’re in that still in that very early stage where we’re just putting our fork pulling the water, and it’s a complicated it’s not very complicated. We tell him, but I’m not which I’m sure you’re very well aware of. But, you know, there are some there are some interesting things happening in in The US. So and Charlotte has been there a little while.

It’s it’s in limited distribution, but where it is, it’s really really moving forward. So we’re just looking at how we can expand that further. Early days with the Spice tailor, as you know, we’ve got one retailer where we’re testing that. It seems to be pretty well. And then we’re about to I won’t go far to say we launch, but we’re just about to update the the security position with that Britishness positioning of all to launch Apple Pie, which is tested really well.

Because interestingly, you might think, quite as The US has got, you know, is known for its Apple Pie, but actually, they’re all quite big. And those individuals, I just, you know, think Apple Pie is in a box. It’s something that I really think about. So that, you know, seems to have been something that retailers are quite liking to look off. So we’ll see.

And it’s it’s early days, but that’s that’s sort of the game plan. And that meanwhile, looking back to Europe. Sorry? No. I was just gonna have to be a good segue into the broader GOP that’s pleasant angle, big apple pies versus yours.

Yes. Yes. Quite. And and we are not seeing any impact at this point. We’re monitoring it really carefully.

And the work we’ve done, yes, that for the majority of our business, those are The UK grocery business. We’re selling things that we use to put together an entire meal. So if you’ve got a family, you know, you’ve got a family of four who’s making a making pasta or they’re making something that needs an octo cube, you’re not gonna use two thirds of the jar or three quarters of the jar because, you know, somebody’s on hopefully, one, and and you’re not gonna use three quarters of octo cube. So we don’t think because of the nature of a lot of our our brands that it’s going to make that much difference. The irony is you say it’s three three, where it’s possible.

You could imagine there are some people who are gonna stop eating cake. Oh, they’re not seeing it. And I I I suspect some of it might be the well, some of it might be there’s not enough people in The UK that are on it to make much of a difference. But I think as well, you you look at the usage habit of cooking cakes. It’s not Mhmm.

You don’t buy one and eat it on the go like you might with a, you know, a confession you got. Yeah. It’s probably, you can shop. It goes home. It sits on the kitchen countertops and different family members eat them, you know, as they as they come and come and go through the kitchen, make a cup of tea.

So we think, therefore, we’ll see the consumption from the rest of the family. So the same, we can’t see any impact, but I’m not sure we’re going to, to be honest. Mhmm. Very interesting. That’s and and then just just very quickly comes to the time.

The the UK government’s evolving metric on diet and health. Is that a continuum for you or something new that we’ve seen in the last week? It feels like a continuum, to be honest. I I think we’ve, you know, we’ve been quite supportive of the health agenda. We see it as both a moral responsibility to help nudge people in the right direction than the recent habit, but also as a commercial opportunity because we know a lot of people are trying to be a little a little healthier and you’ll be the fact like we’ve over the last, you know, more than six years now, probably more like eight years or so, we’ve been, you know, reducing fat, salt, and sugar in our products and making healthier options of of things.

So they are available if if if people want them, and we’ll continue to do that. Yeah. No. No. Chris, I really appreciate the the way you embrace the question.

Thank you very much. And I think sorry. I’ve asked, but, you know, we still need to be aware that we make household options of things and supply people by the original version. But it’s very simple one. Yeah.

Yeah. Absolutely. The right way. Thank you. The next question today will be from the line of Damian McNeither with Deutsche Bank.

Please go ahead. Your line is open.

Damian McNeither, Analyst, Deutsche Bank: Hi. Good morning, everybody. Thanks for taking the questions. A few quick ones for me, I think, hopefully. Just in terms of the market share gains that you’ve made in the period, are you able to sort of quantify the size of those gains that you’ve made and where you’ve taken that share from?

I’m assuming quite a bit of

Harry, Conference Call Operator: it from private label, but whether whether you could just confirm that, please.

Damian McNeither, Analyst, Deutsche Bank: Secondly, on breakfast, you you’ve indicated that you’re doing an increasing amount to focus on that each indication. I’m just wondering whether you could sort of give us an indication of how much of your sales are generated from breakfast at the minute. And then just finally, on on marketing spend. I know you don’t sort of provide the exact numbers, but I was wondering if you could provide us with some color on on marketing spend this year. I’m just interested in some of the influences that you were using as well, please.

Thank you.

Harry, Conference Call Operator: Hi, Mike. So market share gains, we’ve we’ve not we’ve not shared the exact number on that, but it’s you know, you could probably say it’s yeah. I’ll I’ll say that it’s double digit on both volume and and and value share gain. Double digit basis points, just to be clear. And and and I often get asked if where does the share come from.

And it’s an interesting one because we don’t really look at it like that. We we gain market share almost by the consequence of growing faster than the market. So what we intend to do is drive growth and drive growth for the categories, particularly given we tend to have leadership positions in in most of our categories. So we will go out of our way to drive growth for us and for the retailer and grow the category. And the fact that we do that, I guess, better than the the the rest of the category means that there’s a mathematical share gain, which is quite different from us going out and actually targeting where that share is gonna come from.

So this is slightly different approach. As I said earlier, though, we are we have those categories where we are taking, know, consumer from private label into brand and that includes fruit trees and it includes dessert. Does that answer that question?

Damian McNeither, Analyst, Deutsche Bank: Yeah. That that’s perfect. Thank you very much. Yeah. Thanks, guys.

Harry, Conference Call Operator: Yeah. That’s just still relatively small for us. Obviously, we offer a step into it with with the Ambrosia Polish pot, which continue to do, you know, incredibly well and has grown by a huge double digit number again this quarter. And then since then, we bought Field ten k, which has got a very big proportion of its sales, you know, in breakfast. We’ve just expanded that with the yogurt and granola pots, which we expect largely to be eaten breakfast or or morning time.

And also the Fuel ten k big box big box cereals, which are saying quite interesting in the we’re seeing that bringing younger consumers back into that, you know, big box central part of the of of the cereal category. So, you know, it’s still early days for us, but, you know, very double digit growth, and I’m really pleased with the trajectory that we’ve got on that. And then finally, on your marketing spend question. So, look, the direction of travel here, know, we’ve been really clear on it, but we are increasing our overall marketing spend over time ahead of inflation with the intent to, you know, scale up how much we’re spending behind our brands. We’ve been doing this for a number of years, at least at least the last six years.

And and, I mean, you know, plan to spend more this year than we spent last year. And then that’s part of that part of that journey. And we feel as though we’re probably two thirds of the way along the road from where we were versus where we want to be, if that’s any help.

Damian McNeither, Analyst, Deutsche Bank: Yes. That that’s great. Fantastic. And and just can you name drop any influences that you’ve been using, please?

Harry, Conference Call Operator: I I couldn’t. No. And that’s mainly because I I am not that close to it. But at all, plenty of people, yeah, the people are.

Damian McNeither, Analyst, Deutsche Bank: Yeah. Okay. And perhaps just once I’ve got the mic, just quickly on breakfast. Do do you think the portfolio of brands that you’ve got is sufficient to get you to where you want to be in breakfast? Or do do you think there’s still gaps in in that part of the portfolio?

Harry, Conference Call Operator: Well, no. I think with the brands we’ve got, we cover a lot of bases. So we can do creaminess with with the umbrella, which is really helpful on things like porridge. And I think, you know, protein enriched from fuel 10 k also works with a lot of of younger consumers, which is where the growth is and it’s it’s therefore quite exciting. So, know, we’re pretty pleased with what we’ve got, to be honest.

Damian McNeither, Analyst, Deutsche Bank: Okay. Brilliant. Thank you very much.

Harry, Conference Call Operator: Thanks. Thank you. And we have no further questions in the queue at this time. So I would now like to hand the call back to Alex Whitehouse for some closing remarks. So thanks for dialing in everybody this morning.

As as you can tell, I think we’re we’re, you know, pretty pretty confident about the full year outlook. We’re pleased with the overall, I guess, progress across the five pillars of the growth strategy. You know, sweet treats is in a particularly strong position, but obviously, in the short term, you know, grocery being weather affected. But obviously, we know that that’s a you know, we know that that’s a temporary thing, so it doesn’t really knock us off track for the rest of the year or where we’re heading strategically. Where, as you know, we’ve got great ambition to scale up Premier Foods using that branded growth model and using the and using the five pillar growth strategy.

Thank you very much. This concludes the Premier Foods q one trading update analyst conference call. Thank you all for joining. You may now disconnect your lines.

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