The UK's largest food processor, Premier Foods, has reiterated its financial expectations for the coming year.
They predict losses arising from the unseasonably warm weather, offset by stable performances from its core brands and the recent acquisition of one of Britain's largest baking firms, RHM. In a trading statement released today, the food processor (who own grocery brands Branston pickle and Gale's honey), said sales from January to March had been in line with previous estimates and they forecasted that the acquisition of RHM would strengthen the business further.
Premier took over the bakery in March this year and optimistically predict that sales for the subsidiary will be 'slightly ahead' of those seen the previous year. But the company admitted sales for the division had been adversely affected by last summer's warm weather. Wheat prices increased substantially in the autumn of 2006 while consumers also felt the heat, causing consumption to stagnate.
With the acquisition of RHM, Premier have added Britain's second largest bread brand, Hovis, to its portfolio. Trading for the brand has been unsteady due to the relaunch of one of its closest competitors, Kingsmill. Kingsmill, owned by Allied Bakeries, has undergone a revamp in recent months with new recipes, formulation and packaging hoping to boost its profile in the competitive UK bread market.
According to Premier, Hovis' market share has recovered to normal levels following this brief instability in the sector over March and April. Another core brand under the RHM umbrella, Mr Kipling, performed well with double digit sales growth.
The company is due to hold its Annual General Meeting today and is expected to announce full year results next month.