“We went into the quarter with essentially value-led growth, so higher price per unit, and we exited the quarter with volume-led growth, so increased volumes at a lower price per unit,” CEO Alex Whitehouse explained on a media call today (16 May) to discuss annual results to 30 March.

“I think what we'll see through the current financial year is that the shape of the end of our quarter four – so the exit rate of our quarter four – is probably what will play out through this [new financial] year.”

As input-cost inflation cooled, the London-listed maker of Angel Delight desserts and Ambrosia custard has pulled back on price increases in favour of promotional activity and marketing. Questioned on the potential need for further pricing in the absence of any unforeseen factors, Whitehouse ruled that out.

“Once we saw our input costs becoming a bit lower than they were a year ago, we started to decrease our average pricing. We started to do that at the back end of the last financial year, which is why you start to see that volume growth,” he said, declining to provide figures on absolute volumes.

“As we look forward through the rest of this year, I think we're pretty comfortable with where we are. I don't anticipate we'll need to increase prices. That's certainly not the plan.”

Premier Foods also has its eyes on further M&A and capital investment with additional cash on hand from the suspension of pension deficit payments.

“The group has a number of opportunities to invest in the business at attractive returns to increase efficiency and innovation, while continuing to explore M&A opportunities and apply its progressive approach to dividends,” the Mr Kipling brand maker said today.

Acquisitions could centre on the UK and overseas, Whitehouse said as Premier Foods debt leverage ratio dropped to a historical low of 1.2 times.

“The key thing for us with M&A is we're looking for brands because our core capability is building brands,” Whitehouse said on the call. “We're relatively category agnostic. It's more about what's the potential for the brand if we apply our model to it.”

M&A outside UK?

Since taking the helm of Premier Foods in 2019, Whitehouse has pursued a branded growth approach and moved away from the non-branded part of the business. He has closed on two acquisitions in the UK – cereals and snacks bar maker Fuel10K in 2023 and The Spice Tailor the previous year.

“We might do more bolt-on acquisitions in the UK. If we found something as good as Fuel10k or The Spice Tailor again, we would certainly be interested,” Whitehouse added.

“But we might also look at acquisitions overseas that would give us a bridgehead into some of our target overseas markets and therefore would essentially facilitate or accelerate our overseas expansion plans.”

Premier Foods’ international revenue grew 12% in the fiscal 2023 year, helped by the expansion of The Spice Tailor overseas to ten countries, including select European markets, the US and Canada, and New Zealand and Australia.

The Sharwood’s sauces brand owner announced in March it would have an additional £33m ($41.8m) of cash on hand to put to work amid the suspension of pension deficit contributions.

Premier Foods said today that would provide “enhanced options to help the group deliver on its growth ambitions”, including M&A, and capital investment to “increase efficiency and automation” at its plants.

In the UK, where revenue climbed 13.6%, Premier Foods secured 29 basis points of market-share gains.

For the group has a whole, revenue climbed 15.1% to £1.12bn, with branded revenue up 13.5%.

Trading profit showed a 14% increase to £179.5m, although the margin was relatively flat at 16% compared to 16.1% a year earlier.

Asked for some insight into the margin trajectory for the new fiscal year, Whitehouse said: “As a business, what we're about is growing the brand and maintaining our level of profitability.

“So you'll see the trading profit grow broadly in line with turnover, and that's what you can probably expect from Premier Foods in the future years.”

Elsewhere, Premier Foods reduced debt by £38.7m to £235.6m, taking the debt-to-EBITDA leverage ratio below the company’s target of 1.5 times.

Adjusted profit before tax rose 15.1% to £157.7m. Adjusted earnings per share increased 6.4% to 13.7 pence.