(Reuters) - A relaunch of its venerable Mr Kipling cake brand helped Premier Foods Plc to report higher annual profit on Tuesday as the company seeks a new leader.
Premier Foods unveiled plans to review options for its business after former boss Gavin Darby left in January. He was under shareholder pressure following a drop in the share price after a takeover attempt by U.S. food maker McCormick & Co Inc fell through three years ago.
Premier Foods, which also owns the Ambrosia rice pudding and custards brand and OXO stock cubes, said adjusted profit before tax rose 12 to 88 million pounds ($114 million)for the year ended March 30. Revenue rose marginally to 824 million pounds.
Mr Kipling enjoyed a 12% rise in revenue after it was relaunched in Britain with new packaging and design combined with higher marketing spends. The brand dates back to 1967 and was long known for its “exceeding good cakes” advertising slogan.
Backed by the success of Mr Kipling and strong demand for its main brands, Premier Foods said it would spend more money this year on marketing, slowing its progress in the first half of the current financial year.
Premier Foods’ shares were marginally higher at 35.9 pence at 0830 GMT. Management has faced pressure after turning down a 65 pence per share offer from McCormick.
Premier Foods on Tuesday said its review was ongoing.
Premier Foods has also been cutting costs as part of a two-year plan launched in 2017 by laying off people and streamlining its warehousing and distribution network. It expected to save 10 million pounds from manufacturing and logistics operations overall.
“PFD (Premier Foods) has delivered ahead of consensus expectations at the year open ... despite an exceptionally warm summer in 2018 and hiccups in international and the supply chain. A confidence-building update in the round,” Jefferies analysts said.
($1 = 0.7729 pounds)
Reporting by Sangameswaran S and Noor Zainab Hussain in Bengaluru; Editing by Shounak Dasgupta/Keith Weir