Premier Foods share price: what to expect from its full-year results

The British food manufacturer called off its sale of custard business Ambrosia earlier this year but is still weighing up other disposals to reduce its debt, with investors eager for guidance in its 2018 results later this month.

When is Premier Foods’ results date?

Premier Foods will release its full-year 2018 results on May 14.

Premier Foods’ results preview: what does the City expect?

Premier Foods sales declined in its third quarter but were offset by the strength of the group’s Mr Kipling brand, while the company weighs up all other options available to reduce its debt after bailing on its sale of custard unit Ambrosia earlier this year.

Investors are eager for an update on how the company plans to reduce the size of debt on its balance sheet, with reports indicating that it may look to offload other brands in its portfolio after Premier Foods hired boutique advisory firm d'Angelin & Co to explore break-up options.

Group sales in its third quarter were 2.2% lower to £255.6 million compared to the same period a year prior, driven down by decreased sales of its lower margin non-branded Sweet Treats. Meanwhile, branded sales edged 0.2% higher, while non-branded sales fell 10.3%.

However, sales losses were mitigated by significant increases in market share across its three largest brands, Mr Kipling, Bisto and Batchelors, all delivering both volume and value share gains.

Investors will be hoping for a strong end to the financial year after a disappointing Q3, but despite the less than ideal set of third quarter results, the company left its earnings guidance unchanged, with its management expecting net debt to be lower than last year even after scrapping the Ambrosia sale.

Premier Foods debt and share price woes continue

Media reports back in February suggested that Premier Foods opted to drop its sale of Ambrosia after offers came in below its valuation target amid a tough business environment that likely hurt its final price.

‘The Board has concluded that in the present business climate the process will not result in a satisfactory financial outcome. As a result, these discussions have now concluded,’ Premier Foods said in a statement in February.

The news leaves Premier Foods looking at other options for reducing its debt of over £500 million amid mounting pressure from activist investors to drive shareholder value at the company.

Earlier this year, activist investors at the British food maker gained seats on the company’s board of directors, with Daniel Wosner of Oasis Management and Orkun Kilic of hedge fund Paulson & Co. joining as part of a wider strategic review.

All eyes will be on the company’s upcoming results to offer guidance on how the business plans to reduce its debt and recoup losses sustained to its share price after the stock lost over a third of its value after McCormick abandoned its takeover approach in April 2016.

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