Premier Foods reports small first-half profits

Premier Foods has reported a small profit rise in the six months to June 28 2008. It claims that it will hit its targets in the second half as it continues to invest in its brands.

Turnover in the first six months of 2008 was £1.2bn, up 43.5% from £899.1m in the same period last year, but pre-tax profits have been hit, falling 29.4% to £3.6m compared to £5.1m the first half of last year.

Premier chief executive, Robert Schofield, says that it has been building its brands to transform it “into a modern, integrated and very competitive UK food group”.

He adds: “Our expectations for the year as a whole remain unchanged, with progress weighed towards the second half as the benefit of all these fundamental actions begin to flow through.”

It is currently investing in the Hovis brand following a review of the company’s bread business last year. It followed a drop in market share, most significantly for Hovis white bread. It is due to launch a £15m campaign to support the brand and highlight a change in product recipes and quality. It will be created by Miles Calcraft Briginshaw Duffy.

The Hovis division, which includes the RHM Bread Bakeries brands that it acquired last year, showed a 96.5% increase in turnover from the previous year to £462.7m.

Its Grocery division saw a 20.9% increase in turnover from £521.5m to £630.5m. In the division the newly launched Mr. Kipling Cake Bites performed well, aided by a TV ad campaign created by McCann Erickson.

The Chilled & Ireland division achieved a turnover of £196.9m, up 38.6% from £142.1m last year. An extension of the Quorn brand into the snack market with picnic eggs and pork pies helped increase profits.

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