January 16, 2018 / 7:31 AM / a year ago

Premier Foods third-quarter sales rise as brands improve

LONDON (Reuters) - Premier Foods (PFD.L), owner of Mr Kipling cakes and Oxo stock cubes, reported higher third-quarter sales on Tuesday, helped by further improvement in its brands, sending its shares up more than 3 percent.

The company said sales rose 4 percent to 261.4 million pounds, with sales of its own brands up 0.7 percent and products it manufactures for retailers’ brands rising 17 percent.

The results beat some analysts’ forecasts.

Jefferies analysts, who were expecting only 2.8 percent growth, pointed to a 3.4 percent gain in the company’s core branded grocery business, its second straight quarter of improvement.

The company said its expectations for the current year were unchanged and that net debt at the end of 2018 will be lower than last year.

A weekend newspaper report said Premier Foods was in talks to sell its Batchelors brand to Japan’s Nissin Foods (2897.T), its biggest shareholder with a nearly 20 percent stake.

On Monday, the company said any talks with third parties it has had as part of an ongoing review had not gone beyond an “exploratory stage”.

The company has struggled under a heavy debt burden and pressure from investors after it rejected a takeover bid in 2016 from McCormick (MKC.N).

Its shares were up 3.9 percent at 0822 GMT.

Reporting by Martinne Geller; editing by Louise Heavens and Jason Neely

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