Premier Foods sees Q1 sales sour but outlook remains sweet

Premier Foods, whose brands include Ambrosia, Mr Kipling and Oxo, has reported a dip in first-quarter revenues after a combination of warm weather and lacklustre dessert sales dragged on its performance.

Sales fell 3.1 per cent in the 13 weeks to 1 July, due in part to fewer consumers buying Ambrosia where “changing promotional mechanics resulted in lower-than-expected volumes in the quarter”.

The company added that revenue was adversely impacted by a warmer June and “lower promotional effectiveness” in its desserts division.

The group has recently been stung with surging costs of commodities such as sugar, chocolate, dairy, wheat and palm oil, as well as the collapse in the pound.

However, international sales rocketed by a fifth, with Cadbury cake sales in Australia a major contributor.

In January, the firm warned over profits and said it planned to slash costs throughout its supply chain. It expects to deliver savings of £10 million this financial year.

Chief executive Gavin Darby said: “We expect to report positive sales growth in the second quarter, broadly flat sales in the first half and our expectations to deliver progress in the full year are unchanged.”

Analysts Clive Black and Darren Shirley at Shore Capital said: “Whilst far from a glowing performance in Q1, we do actually believe that Premier is toughing it out quite effectively.” 0 The listed food firm noted a decrease in sales of Ambrosia