Premier Foods reports ‘extraordinary level’ of growth as pandemic sees Britons cook at home

Oxo-owner Premier Foods reported an "extraordinary level" of growth on Tuesday in the latest demonstration of the impact Britons staying in and cooking at home due to the pandemic is having on balance sheets.

The company - behind household name brands including Bisto gravy, Mr Kipling cakes and Ambrosia custard - also said that it expects the latest lockdown restrictions see a new increase in demand over the coming month.

Premier reported a pre-tax profit of £50.5 million for the half-year to September 26, up from £15 million in the same period a year earlier.

Revenues grew by 15% in the period to £421.5 million, with trading profits rising by 28.7% to £65.8 million.

The company's online performance was up 112% in the first half, and it said 1.1 million new households bought a Premier Foods grocery product in the period.

Chief executive, Alex Whitehouse, said: "The key driver of that exceptional growth has been that we have had more people eating at home rather than eating out.

"That has accelerated category growth at an extraordinary level.

"Britain really has got cooking again... and so often the cooking that people are trying include our brands."

He added that the prospect of smaller Christmas dinners under Covid-19 restrictions could mean first-time chefs turning to ready-made ingredients for help.

"We are likely to see more novice chefs cooking on Christmas Day, and we can help with that," he said.

The chief executive highlighted that the company continued to see growth post-lockdown in the second quarter.

"We would have expected good, strong revenue growth in the first half regardless of what was happening in the external environment," he said.

Premier said that the "exceptionally strong results" had allowed the company to accelerate debt reduction efforts.  

Whitehouse said that as a result the company is announcing a new net debt to EBITDA target of 1.5x.

Last week the company announced it had sold its 49% stake in bread maker Hovis to a UK private equity firm.