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Premier Foods: First Quarter 2018-2019 Trading update

London / UK. (pf) British Premier Foods PLC announced its first quarter trading update for the 13 weeks ended 30 June 2018. Highlights: Q1 Group sales up plus 1.7 percent, calendar H1 Group sales up plus 4.5 percent, expectations for the full year remain unchanged.

Chief Executive Officer Gavin Darby: «We are pleased to report another quarter of growth, with sales up +1.7 percent compared to last year. Our biggest brand, Mr Kipling, led the charge with an excellent performance on the back of its recent brand relaunch with sales up +14 percent in the UK. Over the last six months, we have delivered sales growth of +4.5 percent which goes to show that our strategy of product innovation and working closely with our strategic partnerships is delivering results. With further exciting innovation across our branded portfolio to come in the months ahead, our expectations for progress in the year remain unchanged».

Trading update

Group sales in the first quarter grew by 1.7 percent compared to the prior year. This reflected a particularly good performance from the Group’s largest brand, Mr Kipling, following a comprehensive brand relaunch in March which included a TV advertising campaign, brand re-design and new packaging. International sales increased approximately 4 percent during quarter 1 and followed a better than expected performance in the previous quarter. Taking these last two quarters together, International sales grew nearly 20 percent.

In the Grocery business, Batchelors continued to display the excellent growth trends it has delivered over the last year, with further demonstration that its innovation strategy, aligned to key consumer trends is working. Batchelors Super Noodles pots and Pasta ‘n’ Sauce pots grew by over 50 percent in the quarter. Sales of Bisto were slower towards the end of the first quarter as category volumes declined due to warmer weather experienced in the UK. Angel Delight again saw double-digit sales growth in the quarter, while Loyd Grossman sales were lower due to changes in the phasing of promotional activity. Nissin branded products Soba Noodles and Cup Noodle grew by nearly 80 percent compared to the same period a year ago.

In Sweet Treats, Cadbury cake sales in the UK were lower in the early part of the quarter as expected due to Easter falling in the previous quarter, while non-branded sales were BGP 0.4m lower as the Group exited two customer contracts.

Non-branded sales in the Grocery business increased by 9.1 percent with continued good momentum in Knighton Foods and contract wins in Stuffing and Foodservice.

Cost reduction + efficiency programmes

The Group successfully completed the second phase of the consolidation of its warehousing and distribution operations into one central location during the quarter. The facility in Tamworth, Warwickshire, is expected to complete the third and final phase of the project in the second quarter of the year.

Outlook

The Group’s expectations for progress in its key priorities in the full year remains unchanged, and as previously communicated, weighted to the second half of the year. The Board is committed to continuing its strategy of improving performance and reducing net debt by BGP 25m per annum, while working in parallel to identify other strategic opportunities to accelerate the Company’s turnaround to create value for shareholders.

Result of Annual General Meeting 2018

Following the Annual General Meeting, the Board of Premier Foods PLC reports that the results of the poll are set out in a table below.

Keith Hamill, Chairman, said: «A majority of shareholders who voted followed the Board’s advice in supporting the re-election of Gavin Darby, CEO, to the Board of the company, and the Board appreciates their support».

«Over recent weeks we have had discussions with a substantial proportion of the major shareholders, which has included listening to the concerns expressed by those whose support we have still to earn. The Board will give careful consideration to all shareholders’ views. Discussions with shareholders will continue, including matters arising from voting at the AGM».

«The Board is committed to continuing its strategy of improving performance and reducing net debt, while working in parallel to identify other strategic opportunities to accelerate the Company’s turnaround to create value for shareholders».

Resolution For % Against % Total cast % of ISC voted Votes withheld(*)
01. To receive the 2017/18 annual report. 603,784,656 99.95 306,758 0.05 604,091,414 71.84% 52,191,131
02. To approve the Directors’ Remuneration Report. 451,896,084 74.77 152,454,204 25.23 604,350,288 71.87% 51,932,255
03. To elect Keith Hamill as a director. 448,737,595 74.22 155,851,186 25.78 604,588,781 71.90% 51,693,764
04. To elect Shinji Honda as a director. 450,009,323 74.43 154,579,761 25.57 604,589,084 71.90% 51,693,461
05. To re-elect Gavin Darby as a director. 387,069,708 59.01 268,879,080 40.99 655,948,788 78.01% 335,915
06. To re-elect Richard Hodgson as a director. 455,225,800 75.29 149,395,142 24.71 604,620,942 71.90% 51,661,603
07. To re-elect Ian Krieger as a director. 452,118,103 74.78 152,462,113 25.22 604,580,216 71.90% 51,702,329
08. To re-elect Jennifer Laing as a director. 455,627,253 75.37 148,858,779 24.63 604,486,032 71.89% 51,796,671
09. To re-elect Alastair Murray as a director. 594,928,015 98.40 9,684,262 1.60 604,612,277 71.90% 51,663,268
10. To re-elect Pam Powell as a director. 455,773,017 75.38 148,839,738 24.62 604,612,755 71.90% 51,669,790
11. To re-appoint KPMG LLP as auditor. 457,039,677 75.66 147,003,858 24.34 604,043,535 71.84% 52,239,167
12. To approve the remuneration of the auditor. 456,864,998 75.60 147,417,133 24.40 604,282,131 71.86% 52,000,414
13. To approve the authority to make political donations. 456,824,958 75.60 147,444,874 24.40 604,269,832 71.86% 52,012,713
14. To approve the authority to allot shares. 411,647,787 68.11 192,710,560 31.89 604,358,347 71.87% 51,924,198
15. To renew the authority to disapply pre-emption rights. 414,413,795 68.58 189,860,746 31.42 604,274,541 71.86% 52,008,004
16. To renew the authority to disapply pre-emption rights for an acquisition or a specified capital investment. 413,988,694 68.52 190,211,381 31.48 604,200,075 71.85% 52,082,469
17. To approve the notice period for general meetings. 399,495,164 66.12 204,745,861 33.88 604,241,025 71.86% 52,041,520

(*)A vote withheld is not counted as a vote in law and therefore is not counted in the percent of votes «for» or «against» a resolution. The total number of shares in issue as at 16 July 2018 was 840,868,583 ordinary shares of 10 GBPence each.