Premier Foods' full-year profits increase 3.5%

A shopper carries a basket of Premier Food products Image copyright Premier Foods

Premier Foods, the maker of Mr Kipling cakes, has said it expects sales to grow 2% to 4% in this financial year.

The company's pre-tax profits increased 3.5% to £86.1m in the year to 2016, while sales went up 0.6% to £771.7m.

It also announced that the managing director of Japanese noodle maker Nissin Foods, which holds a 19.9% stake in Premier, would join its board.

Premier partnered with Nissin in April after shunning a takeover bid from US firm McCormick.

The appointment of Nissin's Tsunao Kijima as a non-executive director comes as the two companies explore areas for co-operation, including sharing intellectual property and technical expertise to develop new products.

The partnership could also enable Premier to distribute Nissin products in the UK and to take advantage of the Japanese company's international reach to offer its products in key international markets.

"The potential opportunities presented by our partnership with Nissin are... very exciting," said Gavin Darby, Premier's chief executive.

International ambitions

The UK company said six of its eight largest brands, including including Bisto, Oxo and Mr Kipling, grew sales by 3.4% on average in the past year, helped by increased investment in marketing and new product launches, while sales of the Ambrosia and Batchelor brands declined 2.9%.

Premier plans to achieve higher sales in the coming year by expanding its cake brands in the US and other overseas markets and offering more products targeted at health-conscious consumers.

Its sales in Australia grew by 47% and US revenues were up 23%, partly thanks to the popularity of its Sharwoods Indian cooking sauces.

The company said its international business unit now employs 28 people, compared with nine a year ago, reflecting its ambitions to grow overseas.

Premier has already launched a reduced salt version of Bisto and has increased the vegetable content in some of its cooking sauces. However, over the next three years, it intends to roll out more products with nutritional benefits, such as reduced calories and lower levels of sugar and salt.

McCormick withdrew its bid for Premier on 13 April after the UK company rejected an initial 52p-a-share offer in February and a subsequent 65p-a-share offer on 30 March. The US company manufactures spices and seasonings.

Nissin agreed to acquire a 17.27% stake in Premier on 24 March. After McCormick abandoned its bid, Premier said it saw "a strong future for an independent Premier Foods" and that its longer-term prospects would be enhanced by the collaboration with Nissin.

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