Premier Foods (LSE: PFD) was down by as much as 11% in early trading, following publication of an interim management statement for the third quarter, ending30 September 2014. Its share price has since recovered a little, but still stands 9% down at the time of writing.
The company said that increasingly demanding market conditions were to blame for a reduction of 4.1% in branded sales over the quarter. Its power brands which include Sharwoods, Ambrosia, Loyd Grossman and Mr Kipling saw sales fall 5.1%. It noted that thecooking sauces and accompaniments category continues to be highly competitive, which it says held back sales of Sharwoods and Loyd Grossman.
Premier Foods said that it anticipates trading profit for the full year to be towards the bottom end of market expectations. However, it went on to say that it is implementinga new organisational structure, which featuresthreedistinct strategic business units Grocery, Sweet Treats and International which it hopes will improve agility, focus and accountability.
Commenting on the management statement, CEO Gavin Darby said:
The initial response to the relaunch of our biggest brand, Mr. Kipling, has been encouraging and we are implementing a strong programme of new product introductions and consumer marketing in the fourth quarter of the year to coincide with the important Christmas trading period. We continue to invest in our brands and strengthen our customer partnerships, while retaining a tight focus on managing costs, the delivery of Trading profit and organic deleveraging. I believe this balanced approach is central to creating value.
Premier Foods has seen its share price fall off a cliff its now around 80% down on this time last year, compared with an essentially flat FTSE All-Share index (its down 0.7%). And the longer term story is even worse. Over the past five years the FTSE All-Share has risen 28%, butPremier Foods share pricehas collapsed by91%.
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