Premier Foods (LON:PFD) is a food producer owning such brands as Ambrosia, Bachelors, Bisto, Hovis, Lloyd Grossman, Mr Kipling, OXO ans Sharwoods (the real money-earning “power brands”), and a “bunch of other stuff”.
Over-expansion over a number of years has left PFD in a perilous debt situation. The old guard was kicked out, and Michael Clarke was appointed new CEO in July 2011. The strategy is to concentrate and build the power brands, run the whole operations more efficiently, sell non-core brands, and reduce debt,
Clarke is delivering on his plan, and disposals are ahead of the schedule required by new banking agreements. Food Manufacturer reported that grocery and Power Brands were up 4.1%, and there have been cost reductions of £20m. ThisIsMoney also reported that PFD is in talks to break into the US market.
Although the debt situation has improved since the last reported accounts, at the interim stage net debt to market cap is about 5:1 – so clearly a high-risk, high-reward play. The company operates in a fairly defensive business line though, debt is being reduced, and the turnaround is beginning to bear fruit.
I’m sticking my neck out on this one.
104p
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Premier Foods plc is engaged in food manufacturing, processing and distribution operates in three segments: Grocery, Bread and Disposed of Canning Operations. The Grocery segment sells ambient food products. Its Grocery segment encompasses a variety of ambient grocery sectors including cakes, ambient desserts, Asian meal solutions, stocks, gravies, soups, spreads, home baking and pickles. The Bread segment sells bread, morning goods, flour products and frozen pizza bases. In October 2012, The Hain Celestial Group Inc acquired its portfolio of packaged grocery brands, including Hartley's, Sun-Pat, Gale's, Robertson's, and Frank Cooper's-with peanut butter, honey, jams, fruit and jelly, marmalade and chocolate product offerings-along with its Histon manufacturing base in Cambridgeshire. In February 2013, it sold its sweet pickles and table sauces business to Mizkan Group. more »
