Premier Foods hikes divi 62% as branded volumes drive strong FY growth

(Sharecast News) - Shares in Premier Foods rose on Thursday after the food manufacturer hiked its dividend significantly and reported strong branded volume growth and trading profits ahead of expectations for the year ended 29 March. The company, known for its Mr Kipling, Ambrosia and Angel Delight brands, reported revenues of £1.15bn for the year, up 3.5% over the previous year, with branded revenues rising 5.2% to £1.01bn.

Headline trading profit rose 6% year-on-year to £187.8m; in January, the company had guided to profits at the upper end of the £180.1m-186.4m forecast range by analysts.

Chief executive Alex Whitehouse said the company's "premiumisation strategy" was paying off, "reflecting the trend for consumers to trade up and treat themselves to ranges such as our Ambrosia Deluxe and Mr Kipling Signature Bites, both of which delivered very strong revenue growth this year".

Meanwhile, revenues in new categories surged 46%, led by Ambrosia porridge pots, while the company also grew its overseas businesses by 23%.

Premier Foods proposed a final dividend of 2.8p per share, up 62% from the year before, as part of the redeployment of funds to shareholders following the removal of the dividend match to its pension scheme. Previously, the dividend match mechanism paid a proportion of cash to the pension scheme whenever a cash dividend was paid to shareholders.

"We are one step further towards the full resolution of the pension scheme," Whitehouse said, which should be achieved by the end of 2026.

The stock was 1.2% higher at 202p by 0822 BST.