July 29, 2020 / 6:26 AM / in 16 days

Premier Foods expects strong start in second-quarter sales to slow down

FILE PHOTO: Boxes of OXO stock cubes are seen on the shelf of a supermarket in Manchester, Britain March 30, 2016. REUTERS/Phil Noble

(Reuters) - Premier Foods (PFD.L), the maker of Oxo stock cubes and Bisto gravy, highlighted a strong start to its second quarter on Wednesday but expects this trend to slow down as people return to eating out of home with the easing of virus-led restrictions.

The Mr Kipling cake maker also said group sales jumped 22.5% for the three months ended June 27, and that its recently-upgraded expectations for the full year remain unchanged.

Last month, the company had forecast revenue and profit for the current fiscal year to beat estimates as the lockdown drove people to cook at home, and said it was unclear as to how consumers’ eating habits might change after restrictions ease.

“We have also observed significant increases in household penetration of our brands in the quarter, as Britain has got cooking again and consumers expand their repertoire of dishes prepared at home,” Chief Executive Officer Alex Whitehouse said.

Premier Foods said all its major grocery brands delivered double-digit sales, with strong performances from Ambrosia, Oxo and Sharwood’s. Nissin noodles products also proved to be extremely popular as sales more than doubled during the quarter.

Whitehouse also said the company repaid 80 million pounds of its floating rate bonds in the quarter, adding that it is exploring further opportunities to reduce financing costs as it continues to cut net debt.

Reporting by Tanishaa Nadkar in Bengaluru; editing by Uttaresh.V

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