New products help boost profits at Premier Foods

(Sharecast News) - Shares in Premier Foods put on weight on Thursday, after annual profits at the Mr Kipling-owner came in ahead of expectations. Revenues rose 2.5% in the year to 28 March to £1.18bn, after branded sales grew 3.4% to £1.04bn. As well as Mr Kipling, Premier Foods owns Bisto, Ambrosia, Oxo and Sharwood's, among others.

Trading profits were 6.7% stronger at £200.4m - ahead of its forecast range of £193m to £198.2m - while pre-tax profits rose 8.5% to £183.6m, comfortably beating consensus for around £176m.

Alex Whitehouse, chief executive, said: "Our continued focus on delivering profitable branded revenue growth has resulted in another year of strong earnings progression.

"Our innovation programme has been particularly strong this year, and has been a driver of growth in our UK core branded business." New ranges included Mr Kipling cake bite tubs, Oxo bone broth and Angel Delight bubble jelly.

Looking to the current year, Premier said it expected to deliver further profitable revenue growth, by expanding into new categories, growing overseas and exploring merger and acquisition opportunities.

"While the group is mindful of the current macroeconomic and geopolitical environment, trading profit expectations for the 2026/27 full year remain unchanged," it noted.

As at 0945 BST, the FTSE 250 stock had put on 4% at 205.75p.

Shore Capital said: "In uncertain times, we nudge up our full-year trading profit estimate by around 2% to £208m, noting higher financing costs. But on an PER of 12.6x and an EV/EBITDA ratio of 7.5x, we see this highly successful proprietary branded British food manufacturer as being fundamentally undervalued, with considerable scope for medium-to-long term ongoing rating expansion."

Premier Foods is a house stock at ShoreCap.

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