Premier Foods is still one of the UK's largest food manufacturers, and the local leader in several segments, including cooking sauces and ambient desserts and cakes. However, it has sold off many of the smaller brands it accumulated during the 1990s and 2000s in an ambitious series of acquisitions. During those two decades, Premier assembled an extensive portfolio of traditional "local jewels" in the ambient grocery sector including Smash mashed potatoes, Ambrosia rice pudding and Bird's Angel Delight. This acquisition fever reached its peak in 2007 with two substantial deals to acquire first the UK operations of Campbell's Soup (including Batchelors noodles, Oxo and Homepride) followed by Rank Hovis McDougall, maker of Britain's iconic Hovis bread, Bisto gravy and Mr Kipling cakes. However, many of the smaller products in what was now a sprawling collection were better-known for their nostalgia value than for their relevance to modern-day shoppers, and combined performance slumped dramatically as the company struggled to consolidate its various different businesses, while also wrestling with mountainous debts. An overhaul of the management team led to a new strategy in which many of the less lucrative products were sold off, slimming the business down by the end of 2012 to focus on a small collection of key powerbrands. Further disposals and restructurings have followed, including the spin-off of Hovis in 2014 (though Premier retains a 49% shareholding). In 2016, in a strategic alliance to enhance the expertise behind its Batchelors instant noodles products, Premier sold what is now a 20% shareholding to Japanese counterpart Nissin Foods. Other key brands in the portfolio include Loyd Grossman and Sharwood's culinary sauces, McDougalls and Paul Hollywood baking products and a long-term license to produce cakes under the Cadbury brand. However, the pressure on Premier to improve performance has continued unabated throughout the past decade. Following a prolonged battle with investors, CEO Gavin Darby finally agreed to step down from the beginning of 2019. CFO Alastair Murray was named as acting CEO, but left the company in 2019 following the appointment of Alex Whitehouse as permanent CEO. Revenues for the year to March 2019 were £824m (down from over £2bn in 2007 as a result of disposals), but a collection of impairment and accounting charges resulted in a net loss of £34m. Excluding one-off charges, the group reported an increase in trading profit. Mr Kipling is the group's single biggest brand, with retail sales of around £153m in 2018 (Nielsen, for The Grocer), followed by Bisto (£126m) and Batchelors (£124m). The group also manufactures private label sauces, stuffing and noodles for retail clients.
Capsule checked 30th August 2019
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Historical profile information for Premier Foods
Adbrands Weekly Update 14th Apr 2016: US spicemaker McCormick & Co abandoned attempts to acquire Premier Foods of the UK, owner of Mr Kipling cakes and Batchelors soups and noodles, citing the unreasonable expectations on price of the target company's board. McCormick had raised its offer to 65p a share, more than twice Premier's value before the offer was received, but the British company declined it, to the frustration of its shareholders. The board will have to work hard to justify their stubbornness. Following McCormick's latest announcement, Premier's share price plunged once more, though it remains well above the levels at which it was trading a month ago.
Adbrands Weekly Update 31st Mar 2016: Spice specialist McCormick & Co raised its offer for UK company Premier Foods from 60p to 65p per share, equivalent to a market cap of £537m, around twice where Premier was trading before any offer was received. Including Premier's substantial debt and pension liabilities, total value of the offer is around £1.5bn. Yet Premier still says the deal undervalues its prospects. It will however agree to meet with McCormick for further discussions. It has already rejected two earlier offers in favour of a strategic alliance with Nissin Foods of Japan, which increased its holding in the company to almost 20%.
Adbrands Weekly Update 24th Mar 2016: A battle may be in the offing for British group Premier Foods, owner of Mr Kipling cakes, Oxo stock and Batchelors side-dishes. It revealed that it has rejected two bids from US company McCormick & Co, best-known for its spices and condiments. It said the bids were "highly conditional" but the most recent valued the business at close to £500m. Though that offer is almost twice Premier's pre-announcement market cap, the company said the offer "significantly undervalues" its value. Instead, Premier unveiled a strategic partnership with Nissin Foods of Japan to expand reciprocal distribution of their respective products. That arrangement was sealed with the purchase by Nissin of a 17% stake in Premier. Under stock exchange rules, McCormick now has approximately three weeks to either make a firm offer or walk away.
Adbrands Weekly Update 3rd Feb 2014: Struggling Premier Foods agreed to sell a controlling 51% stake in its iconic but troubled Hovis bakery business to US-based investor Gores Group for £30m. The latter has agreed to inject £200m into the business to boost efficiency. The business will continue to be led by current bakery managing director Bob Spooner.
Adbrands Weekly Update 21st Nov 2013: Premier Foods of the UK picked Carat to handle local media, following resignation of the account by Starcom MediaVest.
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