Premier Foods (LON:PFD) Issues Quarterly Earnings Results

Premier Foods (LON:PFD) issued its earnings results on Thursday. The company reported GBX 5.60 EPS for the quarter, Digital Look Earnings reports. The business had revenue of £514.50 million for the quarter. Premier Foods had a return on equity of 9.74% and a net margin of 11.62%.

Here are the key takeaways from Premier Foods’ conference call:

• Branded revenue rose 3.2% and trading profit increased 2.4% in the first half; adjusted EPS was up 4%. The company upgraded its adjusted PBT and EPS expectations to the top end of its range, attributing the upgrade to lower-than-expected interest costs.
• Management highlighted growing resilience across the portfolio despite a long, hot summer: Sweet Treats branded revenue grew 6.7%, international revenue rose 8%, and all three acquired brands delivered double-digit growth. The company also reported U.K. market-share gains, while noting that acquisitions are part of its plan to reach consistent mid-single-digit growth over time.
• Sweet Treats divisional contribution fell 16% to £12 million despite strong sales, reflecting heat-related production stoppages and inefficiencies, additional labor to meet demand, and marketing-spend timing. Management expects some production-related pressure to continue in the second half, although it has plans to add capacity and improve efficiency.
• Free cash flow rose nearly 44% year over year, and net debt was more than £70 million lower than a year earlier, leaving leverage at 0.6x. Premier Foods also introduced an interim dividend of 1.12 pence per share, its first in 19 years.
• Management said input-cost inflation is likely to be higher next year than the low-single-digit level assumed at the start of the current year, with the outlook dependent partly on energy and oil prices. Hedges and supplier contracts provide some protection, and the company said it was not yet planning pricing action before its annual review.

Premier Foods Stock Performance

Shares of PFD traded down GBX 3.10 on Thursday, reaching GBX 196.90. The company’s stock had a trading volume of 99,757,688 shares, compared to its average volume of 11,445,881. The company has a debt-to-equity ratio of 24.06, a current ratio of 0.75 and a quick ratio of 0.41. The stock has a market capitalization of £1.69 billion, a P/E ratio of 12.70, a PEG ratio of 1.44 and a beta of 0.59. The stock’s 50 day simple moving average is GBX 196.84 and its two-hundred day simple moving average is GBX 195.89. Premier Foods has a 12-month low of GBX 159.90 and a 12-month high of GBX 212.60.

Analyst Ratings Changes

Several equities analysts have issued reports on PFD shares. Jefferies Financial Group restated a “buy” rating and set a GBX 240 target price on shares of Premier Foods in a research note on Thursday. Shore Capital Group restated a “house stock” rating on shares of Premier Foods in a report on Thursday, July 16th. Finally, Royal Bank Of Canada cut their target price on shares of Premier Foods from GBX 230 to GBX 220 and set a “sector perform” rating for the company in a research report on Friday, July 17th. Four analysts have rated the stock with a Buy rating and one has issued a Hold rating to the stock. According to data from MarketBeat, Premier Foods has an average rating of “Moderate Buy” and a consensus price target of GBX 244.

About Premier Foods

Premier Foods plc, together with its subsidiaries, manufactures and distributes branded and own label food products in the United Kingdom, other European countries, and internationally. The company operates through Grocery, Sweet Treats, and international segments. It offers a portfolio of product categories, including flavorings and seasonings under the Bisto, OXO, Paxo, and Saxa brands; cooking sauces and accompaniments under the Sharwood's, Loyd Grossman, Spice Tailor and Homepride brands; quick meals, snacks, and soups under the Batchelors and Smash brands; ambient desserts under the Ambrosia, Bird's, and Angel Delight brands; and ambient cakes under the Mr Kipling and Cadbury brands.