Premier Foods report 29 percent decline in profit
Hovis owners makes trading profit of £173.7 million
By CFOWorld.co.uk | CFO UK | Published 10:45, 19 March 12
Premier Foods reported a 29 percent decline in profits in 2011 and said 2012 will be a challenging year.
The makers of Hovis, Mr Kipling and Batchelors said on Monday it made a trading profit of £173.7 million. This compares with £245.7 million the year before.
The group also confirmed it had received backing from its banks and pension scheme partners for a four and a half year re-financing package which will extend its bank facilities of £1.4 billion until June 2016.
Its banking covenants have been re-set to support a new strategic plan, focusing on its major brands, and the company's pension schemes have agreed to defer deficit contributions until January 2014, Premier Foods said.
"We intend to draw a line under the performance of 2011," said chief executive Michael Clarke.
"Having put the financing and strategic building blocks in place, our immediate priorities are to implement this re-financing package, continue stabilising the business, re-focus the portfolio and invest in our future growth," he added.
Premier Foods, which said in January it would axe 600 jobs in the UK, is grappling with a hefty debt pile built up during a buying spree that was undermined by worsening trading conditions.
Its net debt stood at £995 million at the end of 2011.
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