Mr Kipling owner Premier Foods’ profits soar despite price cuts

Premier Foods said it would hike its dividend to shareholders after suspending pension deficit contributions last month.

Premier Foods saw profit increase by one-sixth this year (James Kenndy/Premier Foods/PA) (PA Media)

Mr Kipling owner Premier Foods enjoyed rising profit and turnover last year, after cutting prices on some of its ranges and suspending pension deficit contributions.

The company reported a 15.1% jump in pre-tax profit to £157.8 million for the year ending March 30, and hiked its dividend to shareholders following what chief executive Alex Whitehouse called a “really strong year”.

Premier Foods also owns Bisto, Oxo, Paxo stuffing, Ambrosia and Saxa brands among others, making it a mainstay on supermarket shelves.

We have a strong set of plans for this year, across each of our strategic pillars, and with our return to volume growth, we are on track to deliver on full-year expectations

Alex Whitehouse, Premier Foods

Late last year, the company pledged to reduce prices on ranges such as Loyd Grossman cooking sauces and Mr Kipling Bakewell slices over its fourth quarter to the end of March.

That came after it moved to start lowering prices of major branded products in the final three months of 2023, such as Batchelors Super Noodles and some Mr Kipling slices, after seeing falling cost inflation and thanks to efficiency efforts.

However, the FTSE 250 company has struggled with large pension deficits in recent years and has struggled to transfer its profits to shareholders.

An announcement in March changed that, after Premier said it had agreed with the RHM Pension Scheme Trustee to suspend pension deficit contributions earlier than expected, in April this year.

That has freed up £33 million in cash flow for the current financial year.

As a result, Premier Foods said on Thursday that it will hike its final dividend by 20%.

Mr Whitehouse said: “Our brands continue to demonstrate their relevance to consumers, helping them cook and prepare nutritious and affordable meals during what has been a challenging time for many people.

“We recently announced the suspension of pension deficit contributions, significantly increasing our free cash flow, which enhances our ability to invest in infrastructure and pursue M&A opportunities to deliver future growth.

“We have a strong set of plans for this year, across each of our strategic pillars, and with our return to volume growth, we are on track to deliver on full-year expectations.”