FOODS group Premier Foods failed to match analysts’ expectations today with its annual results for the year to December 31.
The group, which employs 300 staff at its Manor Bakeries plant in Moreton, Wirral, saw revenues for its continuing operations fall from £1.99bn in 2011 to £1.75bn, although a profit before tax on its continuing operations of £4.4m compared with a £259m loss the previous year.
It said its planned disposals programme exceeded targets by £40m and was 20 months ahead of schedule and its cost reduction programme delivered £48m of savings and is ahead of plan.
Net debt was reduced to £950.7m.
The contribution of the grocery division decreased by £11.4m to £195.5m and bread declined by £24.8m to £26.9m.
Chief executive Gavin Darby said: “It is important now to maintain continuity and focus on executing our existing strategies to build further momentum in grocery while re-building value in bread.”
Mark Moran, chief financial officer, added: “While it’s clear that markets will remain challenging in 2013, we believe we have the right strategies in place, including the delivery of further overhead cost savings, to make further progress this year.”
However, analyst Graham Jones at Liverpool stockbroker Panmure Gordon said today: “Premier’s results were below our expectation, but it was the half two performance in bread which stands out as particularly disappointing.
“Net debt came in £23m higher than expected at £950.7m, and the pension deficit ballooned from £212.4m to £352.4m, although it’s the actuarial review this year which will be more significant.
“We are cutting our earnings per share forecast for 2013 estimates from 29.4p to 25.0p on lower trading profits in bread and higher interest costs.”
He said the broker will deliver its view on the valuation of Premier after the presentation by new chief executive Gavin Darby later this morning.