Premier Foods banks on top profits despite growing costs

OXO owner Premier Foods today appeared to shrug off rising raw material and ingredients costs as it forecast full-year profits to come in at the top end of expectations.

The FTSE 250 firm, behind store-cupboard staples Mr Kipling and Ambrosia smashed through sales targets in the 13 weeks to early July, with revenues up 6.3% on those seen in the same period pre-pandemic in 2019.

The firm, which reported a statutory pre-tax profit up 129% to £122.8 million for the year to April 3, said that as expected, revenues were down on Q1 2020 when Britons stockpiled in the first lockdown, at just over 13%.

Chief executive, Alex Whitehouse, hailed the “strong trading momentum” and said: “We now expect to deliver adjusted profit before tax at the top end of our expectations for FY21/22.”

Unilever warned yesterday rising costs for raw materials — palm oil is up 70% — are putting pressure on profit margins. But Premier made no mention of any impact from this in its trading update, and declined to comment.

Shares rose 2.7%, or nearly 3p, to 108p, this morning.