Baking operations help boost Hovis profit at Premier
August 05, 2009
by Eric Schroeder
LONDON — The Hovis division of Premier Foods P.L.C. posted profit of £14.6 million ($24.8 million) in the first half ended June 27, up 19% from £12.3 million in the same period of fiscal 2008. Sales fell 3% to £372.4 million ($633.6 million).
The Hovis division, which is comprised of baking, milling and frozen pizza base operations, saw baking sales climb 5% behind a 12% increase in sales of branded bread. The increase was partly offset by lower sales of private label bread and morning goods.
Premier said it continues to see good progress in Hovis since the brand’s relaunch last year. The brand secured a 26.3% share of the wrapped bread market in the 12 weeks ended July 11, which compared with a 22.7% market share in the same period last year.
"Hovis’ market share is now at its highest level for over two years and particularly pleasing is its strong position in the ‘Major Multiples and Co-Ops’ market," said Robert Schofield, chief executive officer. "This continued growth has been driven by a consistent focus on quality, new advertising and packaging supported by a strong program of in-store marketing and promotional activity."
Sales in the milling operations portion of the Hovis division fell 21% due to the exit from a low margin flour contract in the latter part of 2008.
Overall, Premier Foods posted operating profit in the six months ended June 27 of £26.8 million ($45.6 million), down 42% from £46.2 million in the same period a year ago. Sales totaled £1,248.2 million ($2,124.7 million), up 3.5% from £1,205.7 million.