Debt concerns for Premier Foods, profit up

Source: Food and Drink Digital

Date :29/08/2008 09:28:26

Premier Foods has said it passed on soaring food prices to record a four percent rise in first-half profit in line with expectations.

Despite the results, Britain’s largest food manufacturer has seen shares fall due to increasing debt concerns.

The maker of Hovis bread, Mr Kipling cakes and Branston pickle has struggled with spiralling ingredient costs, particularly of wheat. Today, August 29, the company said it has been able to fully recover cost inflation by passing on price rises to customers.

Meanwhile, debt rose to £1.8 billion by the end of June, reflecting restructuring costs.

Chief Executive Robert Schofield said: “Our expectations for the year as a whole remain unchanged, with progress weighted towards the second half as the benefit of all these fundamental actions begin to flow through.”

The company has said it is on track to deliver profit expectations for the year. The average forecast for adjusted pre-tax profit is £212 million, according to Reuters estimates.