Increase in sales of branded sweets fails to compensate for the decline in overall grocery revenue at Premier Foods
## Premier Foods Reports Strong Q1 Performance and Future M&A Potential
Premier Foods, a leading UK food and drink manufacturer, has announced its first quarter results for 2025, demonstrating a robust performance across various segments.
### Key Highlights
**Branded Sales:** The Sweet Treats brand led the charge, with sales surging by 11.4% due to successful new product innovations such as Mr Kipling Signature Brownie Bites and Birthday cake tarts [1][5]. However, Grocery branded sales dipped by 2.0%, primarily due to the impact of higher UK temperatures on certain categories [1].
**Non-Branded and New Categories:** Total sales for the Group increased by a modest 0.3%, with Ambrosia Porridge pots and Cape Herb & Spice making significant contributions. Acquired brands like The Spice Tailor and FUEL10K posted double-digit UK sales growth [1].
**International Sales:** Overseas revenue grew by 5%, with a strong performance in the Australian market [1].
### Future Plans and New Product Development
Premier Foods remains committed to new product development as part of its growth strategy. The company plans to drive further branded revenue growth through the financial year 2025-26 by leveraging its innovation pipeline and improving existing product lines. This strategy is expected to support the unchanged trading profit expectations for the fiscal year [2][5].
In the second half of the year, new product launches are expected to accelerate, with FUEL10K entering the chilled aisle with high protein yogurt and granola pots, and The Spice Tailor extending into Mexican meal kits [1]. These new product launches aim to attract more younger consumers.
### Potential M&A Opportunities
Clive Black, analyst at Shore Capital, expressed excitement about potential M&A opportunities for Premier Foods, anticipating good ongoing financial progress [2]. The company reaffirmed its earnings guidance for the fiscal year 2025-26, maintaining unchanged trading profit expectations [2].
Positive corporate events, including shareholder approvals at the 2025 AGM, further support the company's solid financial performance [3][4]. With a focus on delivering cost efficiency and driving revenue growth through its branded model, Premier Foods continues to position itself for a strong future.
[1] Premier Foods Q1 Trading Update, 2025 [2] Shore Capital Research Note, 2025 [3] Premier Foods AGM, 2025 [4] Premier Foods Annual Report, 2024 [5] Premier Foods Strategy Update, 2024
Industry analysts are closely watching Premier Foods, as the UK food and drink manufacturer forecasts potential M&A opportunities in the finance sector. The company's commitment to new product development and branded revenue growth may further expand its business in various markets, such as the chilled aisle and Mexican meal kits, catering to younger consumers.
