Premier Foods pays first dividend since 2008 after ‘outstanding year’

Mr Kipling-to-Oxo group Premier Foods has unveiled its first shareholder dividend payout for 13 years after seeing sales soar as locked-down Britons turned to home cooking.

The group delivered the cheer to investors as it hailed an “outstanding year”, with 52-week annual underlying pre-tax profits jumping 23.5% to £115.3 million on sales up 10.3%, its highest sales growth since flotation in 2004.

Premier, which also owns well-known brands including Bisto, Sharwoods and Batchelors, has not paid out a dividend since 2008, instead focusing efforts on a turnaround plan and on slashing its debt mountain and pension funding gap.

But chief executive Alex Whitehouse said the group had got its balance sheet back on track and has boosted sales in the UK and further afield, allowing it to pay out a final dividend of 1p a share in a milestone moment for the group.

Premier attracted a raft of new customers during lockdown thanks to a television advertising push and as households were forced to experiment with home cooking as restrictions saw restaurants and hospitality closed over the past year.

It said: “The group’s consumer base expanded this year, as a result of more people cooking from home, experimenting with new recipes and expanding their repertoire of meals.”

Sales of branded groceries leapt 16.9% higher in the year to April 3, while they lifted 4.7% for branded sweet treats.

Premier said its Mr Kipling cakes brand notched up £150 million in revenues for the first time in its history thanks to a TV ad campaign and new product ranges.

This helped drive sweet treat sales higher in the final three months of the year, with branded sales up 7.7%.

It said total group revenues rose 4% overall in the final three months of the year.

Shares in the group rose 5% after the results.

Premier launched a raft of new products in the past year and is planning further new ranges, such as Deliciously Vegan Sharwood’s Indian cooking sauces and 30% less fat Loyd Grossman lasagne sauces.

Analyst Martin Deboo at Jefferies praised a “strong finish” to the year for Premier and its move to restart dividends.

He said the results reflect a “virtuous circle of reinvestment and has banished two ghosts from the past: leverage is at its lowest since the initial public offering in 2004 and a dividend is being paid, for the first time since 2008”.