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Premier Foods quarterly revenue rises

Reuters

By Vidya L Nathan

(Reuters) - Premier Foods Plc (PFD.L) said it would take a closer look at streamlining operations in the coming year and forecast sales growth for the next year, pushing its shares up 3 percent.

On Tuesday, the company said it expected sales for the fiscal year 2016-2017 to grow by 2-4 percent and reported higher fourth-quarter sales of its branded foods, which include Oxo seasonings and Bisto gravy.

Jefferies analysts said they saw signs of a "hitherto-elusive virtuous circle of top line and bottom line growth emerging, with further efficiency gains promised in (fiscal year) 17."

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Premier Foods had posted its first quarterly profit in two years in October, attracting a takeover offer from U.S. maker of spices and seasonings McCormick & Co (MKC.N) early in the year.

The company said on Tuesday it would look at its manufacturing and warehousing operations closely for efficiencies. Premier Foods also said it expects little impact from the rise in the national living wage.

Premier Foods' announcement comes a month after Paulson & Co, its second-largest shareholder, said it was "extremely disappointing" that the board of the British food maker allowed its suitor McCormick to walk away.

McCormick, on April 13 abandoned its takeover pursuit of the maker of Loyd Grossman and Sharwood's cooking sauces, after three proposals - at 52 pence, 60 pence and 65 pence per share - were rejected.

Premier Foods had consistently said that McCormick's offer undervalued the company and that it was capable of growing on its own.

Premier chief executive Gavin Darby said on Tuesday that six of the company's major brands grew at an average rate of more than 3.4 percent and its Sweet Treats business posted sales growth in every quarter of the year.

Branded foods sales rose 1 percent in the quarter to April 2, the company said. Overall, revenue rose 1.4 percent in the quarter to 185.5 million pounds.

Branded foods sales accounted for 91 percent of total sales for the quarter, it said.

(Reporting by Vidya L Nathan in Bengaluru; Editing by Gopakumar Warrier and Sunil Nair)