Princes Group Q1 profits, revenues boosted by Italian products

(Sharecast News) - Princes Group reported a rise in first-quarter profit and revenue on Thursday, driven by its Italian products. In the three months to the end of March, revenue increased 6% on the same period a year earlier to £506.6m, supported by recent perimeter expansion and a resilient performance across core categories, Princes said.

Adjusted earnings before interest, tax, depreciation and amortisation were up 17% to £38.2m, with the adjusted EBITDA margin expanding to 7.5% from 6.8% a year earlier. Princes, known for its tinned tuna, said the margin expansion was driven mainly by the Italian segment, which contributed a 644 basis points increase.

Princes said it delivered "resilient" trading across the majority of its core categories during the period, with Foods and Fish broadly stable year-on-year and positive momentum in Oils. Italian products saw particularly strong growth, underpinned by the integration of additional businesses, including Plasmon.

Excluding the contribution from recent acquisitions, underlying revenue trends remained broadly consistent with FY 2025, it said, reflecting ongoing portfolio optimisation initiatives and deflationary trends.

As far as current trading is concerned, Princes pointed to positive momentum in the second quarter, with its performance in April ahead of the previous year.

Chief executive Simon Harrison said: "The group has yet again demonstrated the resilience of our operating model and the continued execution of our margin-accretive growth strategy. The group delivered strong EBITDA growth, continued margin expansion and a further strengthening of its net cash position.

"'Trading trends have improved entering the second quarter, while our highly cash-generative business model and strong balance sheet continue to provide substantial strategic flexibility. Alongside ongoing operational and commercial initiatives across the group, we continue to see a strong pipeline of value-accretive M&A opportunities consistent with our long-term strategy, and we remain confident in our ability to complete at least one transaction in the near term, whilst maintaining our strict acquisition criteria.

''Whilst the broader macro-economic environment remains uncertain, we remain confident in the resilience of the business and our ability to continue delivering profitable growth, strong cash generation and long-term value creation."

At 0950 BST, the shares were up 2.6% at 388.71p.

Dan Coatsworth, head of markets at AJ Bell, said: "Canned goods may not be the most exciting business to be in but the latest update from Princes Group shows it can be a profitable and cash generative one.

"The company's start to life on the stock market has hardly been an unblemished one - with uneven trading not helping - but the improved margins and cash flow seen in the first quarter are helping win investors over.

"Princes has demonstrated its ability to pass on rising costs to customers - with its products the sort of staples which often hold up well during difficult economic times. They tend to be affordable and long lasting - meaning less risk of waste.

"Princes also has a footprint in unbranded goods which means it is partially insulated from consumers trading down to cheaper alternatives. A strong balance sheet also puts the company in a good position relative to its rivals."

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