Premier Foods, the UK food manufacturer and the company behind Bisto gravy and Mr Kipling cakes, reports a 4% increase in group sales for Q3 (compared to the same quarter last year) at £261.4m.
In the first three quarters of the financial year, sales grew by 2.6% and over this period, six of the group's largest eight brands grew market share in their respective categories.
Total sales in the grocery business were 4.8% higher in the period, with growth in both the branded and non-branded parts of the portfolio.
Growth from Batchelors’
Significantly, given the speculation in recent days (played down by Premier) of a sale of its Batchelors’ brand to Nissin, Batchelors' delivered its fourth successive quarter of sales growth.
Batchelors’ Super Noodles in a pot, the convenience food product manufactured by Nissin, has now delivered over £5m sales since its launch last year.
Additionally, Soba Noodles has delivered £2m sales since the group received distribution rights and the Nissin Cup Noodle product is now also in the market.
International sales increased by 26% in the quarter, reflecting continued strong progress in Australia, the launch of Mr Kipling and Cadbury cake in New Zealand and a number of new customer listings for Sharwood's in Europe and the US.
In recent years, Premier has attempted to reduce its debt burden via disposals, reducing capital expenditure and taking pension contribution holidays. However, despite these efforts debt ratios are still seen as uncomfortably high.
Cost reduction and efficiency programmes were highlighted in the latest trading statement. The group insisted cost savings from the Group's SG&A cost reduction programme were flowing through in both business units as expected, however overall supply chain costs were running ahead of expectations.
The first stage of the three-phase transition to a new centralised warehousing and distribution logistics operation has now been completed, despite some initial implementation challenges.
The next two phases of the Group's transformation programme are on track to be completed during the course of FY18/19, after which, the group insists, full benefits are expected to be realised.
The Group's expectations for progress in FY17/18 remain unchanged. Net debt at the year-end is expected to be lower than the prior year.
The rate of deleveraging is on track to accelerate in future years as the Company pursues its target of reducing Net debt/BITDA to below three times.
Commenting on the latest trading figures, Gavin Darby CEO said: "We delivered another good quarter of growth, with sales up 4% in Q3 and 2.6% in the first three quarters of the year.
"Our International business produced another excellent quarter and our partnerships with Nissin and Mondelez International continue to deliver strong performances, demonstrating their strategic benefits to us."