Published On : 05/18/2023

Mr Kipling maker Premier Foods to stop price hikes this year

By Radhika Anilkumar

(Reuters) -Premier Foods said on Thursday it does not expect further prices hikes in fiscal 2024 after it posted a beat in profit for 2023 aided by price increases and cost-cutting measures.

“We have passed the peak and it does look like we are not going to see prices rising as quickly anymore. We don’t expect to increase our prices any further this year,” CEO Alex Whitehouse said in a media call.

Shares in the maker of Mr Kipling cakes and OXO cubes were up 4.6% at 135.6 pence at 0900 GMT.

The grocery sector has been under pressure from elevated costs and high inflation, resulting in tense discussion with food producers and supermarkets.

Belgium’s Colruyt said last week there was a lack of Mondelez products, such as Milka chocolate and Lu and Oreo biscuits at its supermarkets, with supplies halted amid a dispute over price increases by the food producer.

Strategic partnerships with supermarkets have made conversations on pricing a little easier for the company, Whitehouse said.

Premier Foods sells a range of products — from plain flour to cakes and cooking sauces to quick meals — through supermarkets, convenient stores, and discounters as well as other channels.

The company, which raised its dividend for the year by 20% to 1.44 pence, posted a 13% jump in adjusted profit before tax for the year ended April 1 to 137.2 million pounds ($173.16 million), while analysts on average forecast 135 million pounds.

“Pricing action has already been implemented, and so the focus turns to optimising performance and driving volumes,” analysts at Peel Hunt said in a note.

The company retained its 2023-2024 outlook, while it did not provide specific figures.

($1 = 0.7923 pounds)

(Reporting by Radhika Anilkumar in Bengaluru; Editing by Sherry Jacob-Phillips and Sharon Singleton)

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