Daily Management Review

Premier Food’s ‘Performance To Remain Challenging During The Fourth Quarter’


Profit prediction drags down Premier Food’s shares.

The shares of Premier Foods tanked following its announcement wherein it predicted that the “trading profit” will be ten percent below its previous year’s performance figures. The said anticipation took birth by the “weaker-than-expected third-quarter sales and higher costs”. Moreover, it also revealed a “cost saving and efficiency programme”.
The brands’ owner like “Mr Kipling and Bisto” said that the drop of one percent on the third quarter’s sale in comparison to its respective previous year’s figures, while “branded sales” came down by “3.8%” whereas “non-branded” soared up by “11.6%”. While Digitallook reported that:
“Premier, which confirmed last week that it was in talks with supermarkets Tesco, Sainsbury’s and Asda about hiking its prices, also announced the start of a three-year cost reduction and efficiency programme. It is expected to deliver incremental cost savings of £10m from FY17/18, with equivalent further savings the year after”.
In the words of the Chief Executive Officer of Premier, Gavin Darby:
“Sales in our third quarter were weaker than expected despite a strong December. We now expect category performance to remain challenging during the fourth quarter and as a result sales will be below previous expectations. Additionally, recovery of significant input cost inflation in certain areas is taking longer than originally foreseen. Consequently, we now expect trading profit for FY16/17 to be approximately 10% below previous expectations.”
“Six out of eight of our major brands gained volume and value market share in the quarter although our categories were generally softer due to changes in retailer promotion strategies. Our international business delivered a ninth consecutive quarter of growth, up 15%.”
In response, Shore Capital took a downgraded stance “on the stock to ‘sell’ from ‘hold’”, while it tentatively it reduced its “trading profit forecast by 10% to £118.3m” which leads to a reduction of around fifteen percent, whereby brining the “pre-tax profit estimate to £73.8m”.

Science & Technology

Airbus: Passenger hybrid aircraft to take off before 2035

Ocado To Introduce ‘Mini Robotic Warehouse’ With Standard Productivity

AB InBev’s Piled Up Alcohol Is ‘Too Good to Waste’

Ericsson Mobility forecasts nearly fourfold increase in mobile traffic by 2025

Elon Musk: We received 146,000 orders for Cybertruck

Google turns the screws on political ads

Apple to come up with AR glasses

WEF: Big data regulation becomes a problem

Israeli Firm Accused Of Spying By WhatsApp, Lawsuit Filed Against It

Google Used Quantum Computer To Solve Complex Problem

World Politics

World & Politics

EU to fight food waste

Mexico approves amendments to NAFTA

Finnish parliament to vote for prime minister

Protests in France gain the greatest scale since 2010

Massive blackout unfolds in Venezuela

French And Russian Presidents To Discuss The Moratorium On Missiles In Europe

EU adopts budget for 2020, more funds allocated to climate change fight and innovation

Israeli prime minister indicted in three criminal cases