Premier Foods sacrificed sales to keep up margins
PREMIER Foods, maker of Mr Kipling cakes, said underlying revenue fell 6.1pc in the first half as warmer weather cut sales of Batchelors soups and the company reduced discounting to boost margins.
Sales excluding disposals declined to £364.4m (€461m) from £387.9m a year earlier, the company said in a statement. Trading profit on that basis rose 2.1pc to £48.1m as Premier moved some marketing spending into the second half.
"In an environment of robust competitor activity, the company chose to protect margins over sales, with some consequential loss of share," the maker of Loyd Grossman pasta sauces said in the statement. Premier reduced reliance on "deep-cut" unprofitable promotions, it said.
The trading profit outlook for the year is unchanged, the company said, and it will benefit in the second half from more marketing and product introductions. Premier shares were unchanged at 46.50 pence yesterday in London; they are down 43pc this year.