Premier, which also owns Bisto, Lloyd Grossman sauces and Oxo, said that
underlying trading profit - which ignores the firm's restructuring costs and
interest on its debt pile - was up to £47.4m in the six months to the end of
June.
This was despite underlying sales dipping slightly at £621.2m, 0.9pc down on
the same period last year. The company has cut jobs and sold off divisions
including its jam and jelly business and Sarson's vinegar as part of a
restructuring operation it hopes will return it to profitability.
However, it continued to lose money once other costs were factored in. Premier
made a £23.5m pre-tax loss, due to restructuring costs and interest
payments. This was much improved on the period last year however, when
losses were £45.8m.
"This shows that our turnaround strategy is delivering at the bottom line,"
chief executive Gavin Darby said. Mr Darby, the former boss of Cable &
Wireless Worldwide, has pledged to end the strategy of selling off some of
Premier's most prestigious brands after his predecessor Michael Clarke
embarked on a round of disposals.
The sell-offs have enabled Premier to reduce net debt from £950.7m six months
ago to £890.4m.
Mr Darby pointed to an increase in sales at Premier's eight "Power Brands":
Hovis, Mr Kipling, Ambrosia, Sharwoods, Lloyd Grossman, Oxo, Bisto and
Batchelors. Sales of these rose 3.2pc to £428.3m while the rest of the
group's brands saw sales decline by 5pc.
"The second half will see further plans to grow our Power Brands, in addition to a new £10m of cost savings that we have now identified from our efforts to reduce complexity. As a result, we now expect full year trading profit to be around the top of market expectations," Mr Darby said.
Investors responded positively to the set of results, sending shares up 6.25p, or 7.4pc, in early trading.
"This is a great result for Premier, make no mistake," said Investec analyst Martin Deboo, who recommends buying the shares. "Our offsetting concern is around growth, which decelerated in [the second quarter] outside the Power Brands."
"The second half will see further plans to grow our Power Brands, in addition to a new £10m of cost savings that we have now identified from our efforts to reduce complexity. As a result, we now expect full year trading profit to be around the top of market expectations," Mr Darby said.
Investors responded positively to the set of results, sending shares up 6.25p, or 7.4pc, in early trading.
"This is a great result for Premier, make no mistake," said Investec analyst Martin Deboo, who recommends buying the shares. "Our offsetting concern is around growth, which decelerated in [the second quarter] outside the Power Brands."