Premier reports Jubilee sales boost

Premier Foods has been boosted by patriotic sales of Mr Kipling cakes during the Diamond Jubilee

Published: 8:12am, 7th August 2012
Updated: 7:43am, 8th August 2012

Mr Kipling's launch of "Great British Fancies" for the Queen's Diamond Jubilee celebrations has delivered a boost to sales figures at owner Premier Foods.

The patriotic cakes were supported by a major advertising campaign that helped the UK's biggest food producer to report a 2% rise in sales from its eight frontline brands in the first six months of this year.

Premier, which also owns Hovis, Bisto, Ambrosia and Loyd Grossman, said Mr Kipling sales "increased strongly" after it launched a Snack-pack format and other Jubilee-related products such as Mini Classics.

The St Albans-based company has been struggling under a £1.2 billion debt mountain following a spending spree that included Mr Kipling owner RHM.

However it hopes it is on the mend after sealing a £1.4 billion refinancing deal with banks and £40 million of cost savings ahead of plan by the end of this year.

The ongoing restructuring meant it recorded bottom-line losses of £27.3 million, compared with profits of £11.2 million last time, but focusing on the eight main brands its trading profits were 3.2% higher at £53.2 million.

Premier increased spending on marketing by more than 40% to £24.8 million in the half year, mainly through new television adverts showing the "strengths and heritage" of main brands such as Sharwood's sauces.

While marketing spend in the current half will still be higher than a year ago, Premier plans to switch some of the budget to promotional activity.

It is seeing more products sold through money-off promotions rather than multi-buys as consumers seek value from a single shopping trip. The competitive trading environment was particularly felt in the Hovis bread division, with total sales down by 3.6% to £348.3 million.

Premier said Hovis maintained its share of a declining market through better collaboration with supermarket customers, advertising and the launch of its Farmer's Loaf. More new products are expected to be unveiled this year.