Premier Foods Reports Strong FY24/25 Growth, Trading Profit Beat and 62% Dividend Hike

A Tasty Serving of Growth with Extra Dividends

When a FTSE 250 staple like Premier Foods serves up a 62% dividend hike alongside double-digit earnings growth, even my morning cuppa Bisto gets a bit more interesting. Let’s unpack this kitchen-sink RNS – from Mr Kipling’s magic to pension manoeuvres – and see why shareholders might be eyeing second helpings.

The Financial Main Course: Numbers That Satisfy

Premier’s FY24/25 results read like a Michelin-starred menu:

• 💰 £1.15bn headline revenue (+3.5%), crossing the billion-pound branded revenue threshold
• 📈 6% trading profit growth to £187.8m – beating their own upgraded guidance
• 🍰 Sweet Treats division shining with 7.3% branded revenue growth (those Signature Bites clearly hit the spot)
• 📉 Net debt slashed by £92m to just 0.7x EBITDA – financial indigestion? Not here

The Secret Sauce: Where’s the Growth Coming From?

Three strategic drivers stand out:

• 1. Premiumisation Power: Ambrosia Deluxe (+45% sales) and Mr Kipling’s posh ranges prove Brits will pay extra for indulgence
• 2. International Ambitions: 23% overseas growth – Mr Kipling now flirting with Canadian supermarkets and Middle Eastern dessert menus
• 3. Acquisition Integration: The Spice Tailor and FUEL10K delivering double-digit growth in their first full year under the Premier umbrella

The Pension Plot Twist You Didn’t See Coming

That eye-popping dividend boost isn’t just operational success – it’s financial engineering done right:

• ⚖️ Pension scheme surplus now £648.7m (up £47m YoY)
• 🚫 Suspension of £9.2m annual deficit contributions
• 💸 Removal of dividend matching requirement freed up £5m+ for shareholders

As CFO Duncan Leggett might say: “That’s how you turn a pension scheme from millstone to springboard.”

Capital Allocation: The Recipe for Future Growth

Management’s kitchen priorities for FY25/26:

• 🔧 £50m capex (up from £41.4m) – solar panels and dessert capacity expansions in the mix
• 🌍 International acceleration – Nissin noodles now bigger than OXO in revenue terms
• 🛒 New category pushes – 46% growth in adjacent markets (porridge pots to protein noodles)
• 📈 Progressive dividend policy – now “growing ahead of earnings”

ESG: More Than Just Table Dressing

The ‘Enriching Life Plan’ serves up real substance:

• 🌱 30% carbon reduction over 3 years
• 🥄 45% of portfolio now meets high nutritional standards
• 🤝 1m+ meals donated via FareShare partnership

Final Crumbs… I Mean, Thoughts

While the market digests these numbers, two questions linger:

1. Can Premier maintain 8%+ adjusted PBT growth as private label pressures return?
2. Will the M&A pipeline deliver another FUEL10K-style success story?

But for now, shareholders can enjoy their boosted 2.8p dividend with a side of Ambrosia Deluxe. As they say in the Premier boardroom – that’s the way the cookie crumbles (profitably).

Josh’s Take: This isn’t just another ‘cost-cutting success’ story. Premier’s 5.2% branded growth in a stagnant UK grocery market suggests they’ve cracked the code on premium innovation. The real test? Maintaining this momentum while integrating future acquisitions. One to watch – preferably with a cuppa and a French Fancy.